Posted by Ed on March 23, 2002 at 01:40:54:
Thanks everyone for all the expert advice. I was getting nowhere trying to save this deal and really appreciate your input. I will talk to the buyer tomorrow and try to work something out.
This is a great site!!
Low Apprisal Blows Deal - Posted by Ed
Posted by Ed on March 22, 2002 at 01:37:16:
I “sold” a house FSBO and was going to take a 15% 2nd DOT (seller-carryback) to help the marginal buyer qualify for the loan. The appraisal came in $10K low. I had agreed to help the buyer with closing costs & part of the down payment. Now the deal will not work and I don’t know what to do. Any ideas???
Ed
Re: Low Apprisal Blows Deal - Posted by Dave T
Posted by Dave T on March 22, 2002 at 08:29:28:
Doesn’t the lower appraisal just mean that the buyer’s lender will only make a loan based upon the appraisal?
I don’t believe your deal is dead (unless you have contract language to that effect), but you now have two options.
With a low appraisal, the first mortgage loan will be less than your initial expectation. If your buyer is still willing to go forward at the agreed price, just take back a larger 2nd.
Your deal retains its structure, but you lower your selling price to match the appraisal.
Re: Low Apprisal Blows Deal - Posted by Jim FL
Posted by Jim FL on March 22, 2002 at 02:07:43:
Ed,
Was the appraisal accurate?
How did you arrive at the price to sell to your buyers?
If you really feel, no better yet, KNOW your price is the true value of the house, then check the appraisal.
See if the comps on it are good comps.
What is missing?
Perhaps gather some better comps., and get another appraisal who you supply some comps to, if the lender will allow it.
If not, try another lender, and another appraiser.
And if this still does not work, then perhaps sell the house for what it is truly worth, (the lower amount), or sell it with other terms, like YOU carrying paper, or a L/O.
Good luck,
Jim FL
Re: Low Apprisal Blows Deal - Posted by dave
Posted by dave on March 22, 2002 at 10:06:59:
Isn’t inflated sale price the reason why investors are getting such a bad rap?
I know this pertains primarily to flippers that gouge new buyers, but this effects the seller too.
But then again a seller can sell for whatever he wants…does anyone have an answer to the issue of inflated sale price?
Dave
Re: Low Apprisal Blows Deal - Posted by Ed
Posted by Ed on March 22, 2002 at 02:42:32:
I would really like to sell carrying the paper and avoid relying on this particular buyer getting new financing twice; once for the inital 85% 1st DOT and later down the road when their credit is better established they were to refinance and cash me out of the deal completely. I would have to refinance it to pull some cash out first. I’ve read that a Landtrust is the safest way to sell but have never used one. Is this the the best route?
Re: Low Apprisal Blows Deal - Posted by Dave T
Posted by Dave T on March 22, 2002 at 15:59:58:
Sorry, you are coming at this from left field.
Since no one is saying Ed is getting a bad rap, and no one is saying that his selling price is inflated, I don’t see where you are coming from.
Re: Low Apprisal Blows Deal - Posted by Jim FL
Posted by Jim FL on March 22, 2002 at 03:44:56:
Ed,
A “land trust” is not a “Way to sell”.
A land trust is simply an entity created to hold title.
You could always refi the place now, pull out cash, and then sell to the buyer several different ways.
Perhaps with a L/O, to give you more control, as well as the tax benefits of ownership.
or
Sell to the buyer with a contract for deed, or even carry a mortgage.
I personally prefer selling with a L/O, due to my control freak nature.
Take care,
Jim FL