So we're selling our place the end of this month and the buyer's attorney has concerns about the appraised value coming in too low.

So my question is what does that effect? The amount of a mortgage they can get? The sales price of the home?

The buyer is planning to put 10% down. If they put more down would this issue not be an issue anymore or is it really just affecting the sale price of the home?

 

The bank won't loan more money to the buyer than the house is worth. So basically, unless you have a cash buyer, you can't sell your house for more than the appraised value.

I'm on the buyer's end of this as we speak.

Edit: I'm not a professional, but this is how I understand it. (IMHO, a buyer would be very un-smart to buy a house for more than it's currently worth.)

Edit2: My thread...https://acurazine.com/forums/showthr...=722403&page=2

 

i would think the bank would only allow a loan up to the appraised value of the home. If the home is valued at say 100k and the going price of the comps is 110k, i don't see why it would be a problem if they put 10% down to get the sale price down to the assessed value.

But since things are different now, who knows.

 

This is my understanding as well. So hopefully the seller's mortgage amount will not exceed the appraised value of your house. Otherwise, they will need to put more down, or worst case scenario you'll need to lower your price in order for them to get a mortgage.

I'd make them put more down

 

Thanks everyone. Yeah JB make them suffer.

The good news is we're negotiating a deal with another buyer who doesn't have a realtor. Since we're selling FSBO, we pay a buyer's commission of 2.5% to the buyer's realtor. So technically we can negotiate a lower sales price with buyer #2 and end up making out better.

My hope is buyer #1 tells us we have to lower our price and we can get out of that contract.

 

Why not hang on to the house until the market turns around and rent it out in the mean time?

I know it's not always feasable, but just an idea (you may have already thought of)

 

Why? It's called equity. Need the money sunk into the house to use for the next one.

 

Thunder pretty much summed it up. Most lenders will only lend up to the appraised value of the home (some will only go 80% now days. buyers that cant come up with 20 are usually asked to pay PMI ins and other types of mortgage ins fees) Is it possible to get a 2nd appraisal and see where that comes in?

 

Appraisal is Monday. We'll see what happens.

 

Ah. Didn't realize you were selling to buy. My mistake. I hope you find this "equity" you speak of.

(I kid I kid!)

 

Correct. Your loan officer will use the appraised value in determining the amount of loan you as the buyer are eligible for. Typically where I live, the appraised value is about 20% more than the real property tax value which you can determine online.

If the buyer is only putting 10% down, he'll have PMI in addition to his mortgage. I believe putting 20% down obviates the PMI.

I looked into refinancing my home loan but was SOL because it's a jumbo, even though I have stellar credit. After the whole Fannie Mae/Freddie Mac fiasco, banks have really tightened their jumbo loans and the mortgage interest rate has not improved significantly compared to 1.5 years ago.

 

 

Everone was about right. Most lenders will base loan amount on appraised value at the most. I must say that the regulatory agencies frown on multiple appraisals these days and a high percentage of appraisals are reviewed.

Not unusual for FSBO to be overpriced, happens all the time. Trying to find a buyer to pay more than appraised value in a flat to declining market will be quite a trick. Just curious, who is paying for the second appraisal? If there is a big value difference, will there be a third one ordered?

Please let us know how this works out for you.

 

No one is paying for a 2nd appraisal. We are waiting for the first one to come in.

Our ace in the hole is that we have solidified another offer who does not have a realtor so in reality we can lower our price without hitting our bottom line.

 

Nice to have options, especially in this market.

 

I hope everything goes in your favor!