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Answers (9)
- Concerned_Buyer
- Contributions:5
From a recent similar experience, you can do the following:
1. Get a copy of the report and spell check the report for mistakes. Mine had a laundry list of errors (# of stories, etc)
2. Ask the buyers to have the lender correct the errors, or the property re-appraised
3. Hire your own independent appraisal, after making sure s/he knowledgeable and of good reputation. This is useful to know whether the first report was bogus. Keep in mind that many lenders do not want to take any risks right now, and I suspect some of them to put the appraisers under pressure in that sense.
4. If the buyer have enough cash, split the difference between the appraisal and the selling price with the Buyers
1. Get a copy of the report and spell check the report for mistakes. Mine had a laundry list of errors (# of stories, etc)
2. Ask the buyers to have the lender correct the errors, or the property re-appraised
3. Hire your own independent appraisal, after making sure s/he knowledgeable and of good reputation. This is useful to know whether the first report was bogus. Keep in mind that many lenders do not want to take any risks right now, and I suspect some of them to put the appraisers under pressure in that sense.
4. If the buyer have enough cash, split the difference between the appraisal and the selling price with the Buyers
- Linda Strasberg, "L Strasberg"
- Contributions:2314
Is it a cash deal? If not, renegotiate the purchase price to reflect appraised value.
- Eric Patterson, "Eric Patterson"
- Contributions:27
jkonstant,
"Good news for a buyer means they got a deal that might sustain as values decline. A $200K property today might be worth $180K in six months or a year from now. A 10% decline is more likely than a 5% increase."
The Denver market has already sustained a 10 to 35% decline in property values in the last 3 years. Forecasts for 2009 housing prices predict a loss of 5% in the Denver area, 11% in Aurora, and 12% in Boulder, most of these properties were bought at the height of the market or are in heavily foreclosed neighborhoods.
Despite those forecasts a 2 to 5 % increase in prices has been consistent in the more desirable neighborhoods for the past 2 years. While maybe "good news" wasn't the correct term since we do not know the neighborhood in question I think it applies for buying any home for the long term in the Colorado market considering the metro area is expected to increase in population by over 25% in the next 15 years as well as other factors to numerous to list here.
Good luck Gingeran, I hope your deal goes through!
"Good news for a buyer means they got a deal that might sustain as values decline. A $200K property today might be worth $180K in six months or a year from now. A 10% decline is more likely than a 5% increase."
The Denver market has already sustained a 10 to 35% decline in property values in the last 3 years. Forecasts for 2009 housing prices predict a loss of 5% in the Denver area, 11% in Aurora, and 12% in Boulder, most of these properties were bought at the height of the market or are in heavily foreclosed neighborhoods.
Despite those forecasts a 2 to 5 % increase in prices has been consistent in the more desirable neighborhoods for the past 2 years. While maybe "good news" wasn't the correct term since we do not know the neighborhood in question I think it applies for buying any home for the long term in the Colorado market considering the metro area is expected to increase in population by over 25% in the next 15 years as well as other factors to numerous to list here.
Good luck Gingeran, I hope your deal goes through!
- Jeff Konstant, "jkonstant"
- Contributions:1970
It's good news for the buyer if the appraised value is lower than the purchase price because this will give you leverage over the seller to amend the contract to the appraised value.
What! It is not good news for the buyer. Even if the buyer can negotiate a reduction with the seller to make the deal work, it means they are buying a house for what it is worth today. Good news for a buyer means they got a deal that might sustain as values decline. A $200K property today might be worth $180K in six months or a year from now. A 10% decline is more likely than a 5% increase.
What! It is not good news for the buyer. Even if the buyer can negotiate a reduction with the seller to make the deal work, it means they are buying a house for what it is worth today. Good news for a buyer means they got a deal that might sustain as values decline. A $200K property today might be worth $180K in six months or a year from now. A 10% decline is more likely than a 5% increase.
- real estate mike
- Contributions:2001
Not quite sure in Colorado, but in Tx we have a one page amendment that changes the sales price(and relevant numbers) and the only trick is getting the seller to sign. The deal could fall apart but hopefully your buyers agent is working, at your direction, to insure it doesn't.
- Eric Patterson, "Eric Patterson"
- Contributions:27
It's good news for the buyer if the appraised value is lower than the purchase price because this will give you leverage over the seller to amend the contract to the appraised value.
The lender will use the appraised value instead of the purchase price on the contract to underwrite the loan. Generally a $5,000 difference should not kill the deal unless the lower value is because of the homes poor condition which is a red flag to underwriting.
The lender will use the appraised value instead of the purchase price on the contract to underwrite the loan. Generally a $5,000 difference should not kill the deal unless the lower value is because of the homes poor condition which is a red flag to underwriting.
- Paparella Vicki, "Vicki Paparella"
- Contributions:16
It depends on the loan amount. If you are putting enough down payment, it wouldn't matter as long as you are ok with the appraisal coming in lower than your purchase price.
- wetdawgs
- Contributions:26751
Either you can renegotiate with the seller, or you can pony up the difference, or you can cancel the offer if that was in the original contingencies.
- Alisa Hagner, "AlisaDenver"
- Contributions:381
What does your contract say?
Can it? Yes. Does it? Not usually.
Can it? Yes. Does it? Not usually.
What happens if the appraisal is $5,000 lower than the sale price?
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