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Answers (16)
- Wes Black
- Contributions:509
Depends on your locality. Seems like here in Louisville we seem to be getting about 96% of current listing price. It is all negotiation .
- Theresa "Terri" Froumy, "Theresa Terri Froumy"
- Contributions:1
Absolutely Ok to ask for a reduction. Especially in this market. The builder should work with you. Good Luck!
- Mike Vazquez, Realtor at ERA, "Mike Vazquez"
- Contributions:62
Ask for it, they can only say no...and now they have less options since any buyer needing fha financing will have the same issue for the next six months.
- Christine McDaniel, "Christine McDaniel"
- Contributions:414
Our purchase agreements (state forms) say that the home must appraise for the purchase price or more. If it does not there are four options:
1. The seller reduces the price.
2. The buyer brings the extra amount to the table because they can only get financing for the appraised amount.
3. They meet half way. The seller reduces the price half of the amount and the buyer brings the other half to the table.
4. Either party can walk away.
The previous posts are correct. The FHA loan will stay on the books for 6 months. Asking the seller to drop the price due to the appraisal is the most common first option. Just keep in mind they do not have to drop the price. If they will not drop the price, you still have options. Maybe they would drop 80% and you would only have to come up with 20%. Some of my buyers have borrowed from family to procure funds. Everything is negotiable.
Good Luck, Christine
1. The seller reduces the price.
2. The buyer brings the extra amount to the table because they can only get financing for the appraised amount.
3. They meet half way. The seller reduces the price half of the amount and the buyer brings the other half to the table.
4. Either party can walk away.
The previous posts are correct. The FHA loan will stay on the books for 6 months. Asking the seller to drop the price due to the appraisal is the most common first option. Just keep in mind they do not have to drop the price. If they will not drop the price, you still have options. Maybe they would drop 80% and you would only have to come up with 20%. Some of my buyers have borrowed from family to procure funds. Everything is negotiable.
Good Luck, Christine
- Deborah Holmes, "Debbie Holmes"
- Contributions:386
Unless the buyer has cash you the seller needs to come down to the appraisal price or the seller wont sell the home...
- Gettysgirl
- Contributions:15
Thanks, Dan! I was so lost there for a moment. lol
- Joe Hoppis, "Joe Hoppis"
- Contributions:18
It's a gift! Take it and use it as leverage.
- Dan, "the_country_hick"
- Contributions:4699
OP= Original Poster. The person who asked the question.
- Gettysgirl
- Contributions:15
Shasta Steve, what/who is an OP?
- shasta_steve
- Contributions:448
Ok guys there is a big one here everyone is missing. The OP said they were going FHA. Unless something has changed very recently once a FHA appraisal comes in it sticks with the property for six months or until the property sells. Doing another appraisal is not going to help in this situation. This is one reason why many sellers do not like FHA loans. It may also be leverage for the OP to get the price reduced as it effectively prevents the builder from selling this house FHA for any more, unless the buyer has lots of cash and lets face it the reason you go FHA is because you don't have lots of cash.
- Troy Sheldon, "Troy Sheldon"
- Contributions:38
It is resonable to ask the builder knows the appraisal has to meet asking price and as builder they should be familiar on financing
- Robert Bentley, "robertbentley"
- Contributions:56
Yes as they really have no choice, could ask for another appraisal or to see the comps used, but bottom-line the bank will not loan above value.
Should have been written in to contract subject to Bank appraisal at or above purchase price.
Robert
www.NewbuyrportVip.com
Should have been written in to contract subject to Bank appraisal at or above purchase price.
Robert
www.NewbuyrportVip.com
- Hamp Yonce, "Zilluminati"
- Contributions:3463
It's more than reasonable. You could call it fair, and/or necessary.
- Dan, "the_country_hick"
- Contributions:4699
If it does not appraise it is the only thing to do. Without that reduction happening no deal can happen,
- Pete Caspersen, "Pete Casperen"
- Contributions:24
Absolutley. The builder will most likely run into the same problem with another buyer later. It's in the best interest of both Buyer and Seller to work this out. I wouldn't get hung up on the 5% of the price. Bottomline, sounds like your best option right now is to ask for the price reduction (even if it were more/less). Hang in there.
- Paul Dinerstein, "Long Island NY"
- Contributions:64
It surely is reasonable to ask. After all, the result of your bank's appraisal is clear. But was the appraisal correct? If you're willing to pay the originally agreed upon price, perhaps the builder has a lender relationship that will appraise it at that price...assuming you get a similar interest rate. Good luck, as this situation must be disapointing.
Is a 5% price reduction reasonable to ask of a home seller?
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