Profile picture for urbanfarmer

Buyer is asking for seller assist AND now a loan since the appraisal came in high.

The appraisal came in high pushing the seller assist over the max allowance from the mortgage company. Now the buyer's agent is asking us for a separate $4500 loan to the seller until she gets her $8,000 tax rebate. We don't know anything about her and this seems too much. Do we let the deal fall through and start over? Any suggestions? Thanks.
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November 02 2009 - US
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Replies (7)

If you start over how long do you think you will receive a qualified buyer?
At what price? Do you think you are guarnteed to get the same dollar appraisal?

You're not giving anthing up, are you? You could also place a lien against the property after it's recorded for your $4,500 loan, if you're not comfortable about being paid back, couldn't you? I'd think this over.  Usually, the first buyer is the best one. Now, you can move on. ... Best wishes, Rudi
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November 02 2009
Sounds sketchy.  I don't understand how a high appraisal could reduce the amount of assistance.  If anything it should increase it.   Did you mean low appraisal?

Do you know what type of financing the buyer is using?  How much earnest money did they deposit?
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November 02 2009

Seller contributions are typically set by percentage, 3-6% depending upon the type of loan.  This is based on the sales/contract price not the appraised value.  An appraisal that comes in high would normally not have any impact on the numbers (low yes, thanks HVCC)  Lenders base analysis on selling price or appraised value, which ever is lower and will even use the lower of the two for between 6 months to a year for equity seasoning.

Perhaps there is more information that would help.  Is the purchase contract a moving target, is it a family transaction?

As Rudy said, you could do a seller carry/note but make sure all is recorded.  The lender will also factor this in to the loan to value (CLTV) calculations. 

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November 02 2009
Profile picture for CORONA NICK
Are you really willing to risk not selling your house for a measily $4,500???? In this market, I would sell, unless you dont mind not selling in the near future.
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November 02 2009

Hi urbanfarmer,

An appraisal coming in high doesn't affect a purchase transaction in this way.  Sounds like the appraisal came in low, making it where the buyer needs to bring the difference between that value and the contract price to the closing table. 

If this is the case please note that loans from sellers are as a general rule are not allowed anymore. 

If I can help in any way, please just let me know.  Enjoy your day !

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November 03 2009
Profile picture for wetdawgs
If the appraisal is too low(?), perhaps it is time to lower your price.   I've never heard of an appraisal being "too high"
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November 03 2009
An appraisal can not be to high.   You are going to use the less of the two between the sales price and the appraised value.  
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November 03 2009
 
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