Tuesday, August 3, 2010

Low appraisal

Oh my gosh! I am super stressed out! Why do these things always happen at the worst possible time? John Chris is out of town for work this week, and I got a very upsetting phone call from our REALTOR. She just called to let me know that the appraisal on our current house just came back very low. She tried to talk to the appraiser about the comps he used and how he figured such a low amount.
Story is that no homes in our community have sold in the past 6 months, but he didn't feel comfortable using other comps in the same city with similar finish out. He decided to pull old comps for homes in our community that sold further back than the 6 month rule. One of the houses that he used was a house that a relocation company purchased when the homeowner was moved. Needless to say, the relo company "dumped" the house for a ridiculous price. Unfortunately, the agent did not choose to complete a non-disclosure statement, so now we will pay the price. The other part of this issue is that the contract price was increased by the purchaser in order to roll in closing costs. Basically we raised the price and will pay that amount worth of her closing costs. Fine agreement until the house didn't appraise for the contract price. I told our agent that we would adjust the contract price in order to offset the low comp part of the difference, but I think the purchaser needs to come up with her own closing cost portion. Fair right?
Yes, but the purchaser doesn't have the liquid finances to pay the closing costs! What? John Chris and I had to make a decision. Either say no to lowering the price and lose the sale or say yes and pay all the additional funds for the purchaser to close on the house. We elected to go ahead and "suck it up". I am devastated, because that will dramatically lower the amount of renovation work we will be doing to the next house. There goes my new master bathroom.

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