house did not appraise

lpavlas · August 2013

my husband and i put an offer on a house, and just found out the house didn't appraise. the seller was asking 120,000 and after negotiating closing costs and all that we came to a deal of 122,500. The appraisal came in at 118,000, and it was FHA. We know this appraisal stays with the house, So now we are waiting for the seller. He's pretty much upside down in the house, the house was appraised for 10,000 less than what he paid for it in 2008. We are hoping the seller will bite the bullet cause we really love this house and don't want to walk away. we live in houston, tx area, if that makes a difference.

Has anyone ever had a similar experience and how did it turn out for you?

moonprincessd · August 2013

We had a similar situation, we made a deal on $190,000 and the appraisal came back at 185,000. We were ready to walk if the seller didn't accept because we weren't paying more than the house is worth. He ended up accepting the $185,000 (which had been our original offer to begin with, so we were right on the money). Then again he was in a time crunch and we were the only ones that made an offer (the house was previously being rented out and the people renting were moving out soon).

Hope the seller agrees or walk away! It's not worth paying more than a house is worth because then you'll run into what he did, having to sell it for less than he paid for.

mcskatcat · August 2013

I haven't been in this situation, but the fact of the matter is that the seller doesn't have much of an option. We're lucky enough to have a cash offer right now (and hence don't have to worry about the house appraisal) but our choices in that scenario would either be to hang on to the house and rent it out, or to find a way to let it go for less. It stinks, but you shouldn't be expected to come up with extra cash in this situation.

Sisugal · August 2013

The sellers will not be able to sell to anyone without accepting 118.

You may have to renegotiate the price and possibly give up any closing costs that the seller was going to pay.

They may not be willing to pay for much should the inspection bring attention to items that need repair/replacement.

SURFERxGIRL · August 2013

This happened to us when we bought a few months ago. The sellers were asking $198,000 and we had put in an offer for full price and closing costs to try to beat out the competition (there were 5 other people bidding for the home). We were expecting the appraisal to come in a little bit lower than the asking price but were all surprised when it came in at nearly $15,000 less than asking price. The sellers had only lived there for a few years and were really upside down on their mortgage (they had paid $330K 5 years ago and I think had taken out a 2nd mortgage, not sure). After the appraisal came in so low there's no way they would have been able to get someone to buy it for more than that.

In our contract we had asked them to make some minor repairs to the house (fix the deck, replace the windows where the seals had broke, replace doors that had holes in them, things like that that the home inspector pointed out) but when the appraisal came in low they couldn't afford to make any repairs. We ended up just offering to pay the appraisal price and closing costs since we figured it wouldn't cost us that much to fix the things that needed fixing. As a gesture of good will they did replace the deck boards that needed to be fixed, so that was nice of them.

Best of luck! I hope it all works out.

vpine · August 2013

Looks like he will have to accept the $118K or both will have to walk away, good luck!

HouseOfGreen · August 2013

Oh wow! I am so sorry, this is my biggest fear. I hope that everything works out for you guys.

lpavlas · August 2013

So we just came to an agreement of we sell at 118,000 and he will only provide 2000 for closing costs. if we didn't take the deal he would've put the house back on the market. not exactly what we wanted but, we get our first house!

Sillygirl45 · August 2013

Our house appraised right at what we were paying and they paid $2,000 closing costs, so pretty similar. The good news is our value has gone up about $20,000 since we bout 6 months ago. The neighborhood went nuts with bidding wars for houses. Good luck!

MrsS728 · August 2013

I don't know about appraisal differences, but I know that our seller lost $20K from the sale of this house. She bought it for $295K and sold it to us for $275K. The market is very different than 5 years ago, BUT it is going up!

SoSweet06 · September 2013

Wow....glad it worked out for you. We were in the same situation, and the seller wouldn't come down. We walked...seller did end up selling the house for more than the appraisal. The buyer must have REALLY wanted the house, because it needed a LOT of repairs as well...

house did not appraise

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