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martyrdumb posted:Mortgage processor here -- I see low appraisals every week. The listing agent/buyers may simply have overshot the value of their home. You can't get another appraiser/appraisal without going to another lender. Try looking for additional comps and submitting them for reconsideration of value. But if there are none better, or the value doesn't get bumped up with the submitted comps, then the value is the value. In that case, offer down to the appraisal price and let the sellers choose to either come down to your number or walk away. Economic Sinkhole posted:pantsofwar, you are in a very strong negotiating position. If you offer to change the sale price to the appraised value and they decline, they will have to take their chances with a new appraisal down the road with a new buyer. It will be advantageous to them to accept your new, lower offer (devil they know vs the one they don't). If you're worried about them you could try to throw them a bone with a longer closing, later move out, remove your request for $1k in repairs, or whatever. Be especially wary of the agents' recommendations here- their #1 priority is to close this deal and they don't really care how. I'm under contract for a house and based on preliminary feedback from our agent's conversation with the appraiser, we expect the appraisal to come in a bit low (say, 5%). It's a weird geographic area without many comps to the property. We've been looking in this market for a year and a half and think our number is generally pretty good; perhaps a couple percent high because we really value the property's specific location, features, and charm. The contract has an appraisal contingency that, much like the two posts I've quoted above, will let us walk if the sellers do not match the appraised price. But, in the contract and the two posts above, there isn't any discussion of compromising and buyer/seller meeting in the middle between original contract price and appraised value. Why is no mention of this possibility made in contracts (like the explicit wording in ours) or some seemingly well informed posts? Am I missing something? I see it mentioned sometimes. We're trying to figure out how to proceed when the appraisal inevitably comes in low. I have basically searched this entire thread for appraisal discussion and particularly enjoyed the multi-page saga about someone agonizing over $15k on a $1M+ dream home. pmchem fucked around with this message at 16:40 on Jun 15, 2019 |
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Jun 15, 2019 16:36
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pmchem posted:I'm under contract for a house and based on preliminary feedback from our agent's conversation with the appraiser, we expect the appraisal to come in a bit low (say, 5%). It's a weird geographic area without many comps to the property. We've been looking in this market for a year and a half and think our number is generally pretty good; perhaps a couple percent high because we really value the property's specific location, features, and charm. The contract has an appraisal contingency that, much like the two posts I've quoted above, will let us walk if the sellers do not match the appraised price. Your contract ENABLES you to walk away without loss of earnest money should that contingency fire, because most buyers don't have cash on hand to close the difference, and some sellers wouldn't be willing to budge. On the other hand, that same clause does not REQUIRE you to do so. The posts above yours mentioned specifically that the sellers were unwilling to compromise on their price (IIRC because they had other offers). However there are examples of people doing all kinds of maneuvers - including real estate agents forgoing a portion of their commission - to make the parties whole if the appraisal comes in below the ask. The contract doesn't make this concrete because that's not how contracts work. You don't formally stipulate the rule for future negotiations, they arise in the setting of various clauses that you do put in place.
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Jun 15, 2019 16:42
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The bank is unwilling to finance more of the purchase price than is appraised because a mortgage is backed with real estate and the value of the real estate determines the maximum they could recoup if you fail to pay their investment. Thus, offer what is appraised or be willing to pay extra yourself out of pocket on a house that is appraised lower than your purchase price.
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Jun 15, 2019 16:44
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EAT FASTER!!!!!! posted:On the other hand, that same clause does not REQUIRE you to do so. The posts above yours mentioned specifically that the sellers were unwilling to compromise on their price (IIRC because they had other offers). yeah, that's a good point, I may have been interpreting things too strictly.
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Jun 15, 2019 16:45
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pmchem posted:yeah, that's a good point, I may have been interpreting things too strictly. The appraisal is just another data point in the negotiation over asset price between buyer, seller (and buyer's financing). The reality is that if you're willing to pay a cash premium for this place you might never recover because you genuinely believe it is worth the specific price above and beyond your financing, then you're free to move forward. You could just as easily attempt to negotiate for concessions for the sellers, since they're unlikely to get your purchase price if the house assesses low. (However, the one most useful "data point" regarding assessed price is - or at least ought to be - the agreed purchase price between buyer and seller).
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Jun 15, 2019 17:03
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Sanity check: https://www.zillow.com/homedetails/925-Meadowlark-Dr-Iowa-City-IA-52246/113433776_zpid/
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Jun 15, 2019 17:09
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Ours was appraised 10k less than what we offered. Their agent warned them the comps were not looking good, likely between 10 to 15k, and that we'd probably walk if we had to make up the difference. So the appraisal came out and they accepted it. But used the opportunity to take their appliances. Had they said "nah, we're not budging" we would've walked. There was a house that we initially really liked (we've since found better) but they passed on our 5k above asking. Our realtor and lender both knew it was over priced so we put in a "we'll pay 5k over appraisal if that's less than our current offer". About 2 weeks later it's back on the market. Spoke with our realtor, the appraisal came in 20k under asking. Sellers wouldnt budge. Went back on the market, pending, 2 weeks later back on the market again. Finally sold, according to redfin, at their asking price. Optimus_Rhyme fucked around with this message at 17:29 on Jun 15, 2019 |
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Jun 15, 2019 17:23
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I’ve never had appraisal problems, but does a lender care about appraisal vs. buying price, or appraisal vs. loan amount?
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Jun 15, 2019 17:34
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My understanding is it's the loan amount vs appraisal they care about. If the home is worth 450k but you offered 500k, the bank will only give you 450. That 50k needs to come from somewhere, likely your cash, or sellers negotiate the price down.
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Jun 15, 2019 17:38
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The bank agrees to loan you a z% of the appraised value of the house for x% interest over y years. If that z% of the house goes up then they re-evaluate. Usually this means that the interest rate goes up, pmi is added, or they refuse to lend. It's all a negotiation between perceived value (purchase price), credit worthiness, and cost of capital (loan.) Every person involved can make choices to move the needle around, including a bank deciding they want to write the loan on the same terms even if it's (z+a)% of the appraised value.
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Jun 15, 2019 17:58
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Let's say I have a $350k loan with 0% down. I come into some money and could pay 20% down in the first month after closing. Would it be better to do that, or to just make much higher monthly payments on the principal, like 2-3x the monthly payment? I have a VA loan, so recasting isn't an option. I'm technically good at math, but interest is some sort of occult sorcery I don't understand.
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Jun 15, 2019 19:45
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Will construction loans cover razing old houses? There is a lot for sale in a neighborhood we want that has a house on it that is probably uninhabitable. The plan would be to buy the lot, raze the house, then build on it. I'm trying to figure out if that means I want to build a $400k house do I need $180k sale price + $20k raze (or whatever, probably more lol) + $400k construction and if I can get that all in one financing round? I just am trying to figure out a financing strategy since paying for the property for sale as is would consume more cash than we have, so would need to finance it. I recall Motronic's post a while back about construction loans being tranched so things can go really slowly--we are living in a small house rent-free right now so have about the most open-ended timetable we will ever have if we want to build.
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Jun 15, 2019 19:55
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EAT FASTER!!!!!! posted:Sanity check: That is like 3x the square feet of any house I would want to have to maintain.
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Jun 15, 2019 20:19
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Hed posted:Will construction loans cover razing old houses? Talk to a bank and a builder. They should be willing to finance whatever you want if the resulting structure is worth more than the balance outstanding. I have heard of "one wall rebuilds" where they demo the house down to one wall and file a permit + plans to rebuild it. It can bypass some of the processes for building from scratch.
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Jun 15, 2019 20:31
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PRIVATE UNOBSTRUCTED VIEWS (of some trees) Like, how is it possible for someone else to obstruct the views of the trees that border my own property
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Jun 15, 2019 20:46
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EAT FASTER!!!!!! posted:Sanity check: "Hand scraped" flooring needs to DIAF. It looks bad in any situation IMO but in a huge house like that where you can stand in one vantage point and look out over 1800 square feet of it? Ugh.
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Jun 15, 2019 20:56
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Cormack posted:That is like 3x the square feet of any house I would want to have to maintain. It's just stupidly, stupidly big.
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Jun 15, 2019 21:09
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bird with big dick posted:"Hand scraped" flooring needs to DIAF. It looks bad in any situation IMO but in a huge house like that where you can stand in one vantage point and look out over 1800 square feet of it? Ugh. I hated this far less in person than I thought, but yeah. It's also stupidly delicate.
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Jun 15, 2019 21:09
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EAT FASTER!!!!!! posted:Sanity check: Submit this to McMansion hell please
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Jun 16, 2019 00:07
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bird with big dick posted:"Hand scraped" flooring needs to DIAF. It looks bad in any situation IMO but in a huge house like that where you can stand in one vantage point and look out over 1800 square feet of it? Ugh. We saw a place where the whole place was manufactured this. An obvious flip. They didnt put any sound insulation under it in the bedrooms. So everyone walking around upstairs just echoed through the whole house.
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Jun 16, 2019 03:28
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EAT FASTER!!!!!! posted:Sanity check: As someone who owns a 4000sqft house you really need to know what you’re getting in to. Painting that will cost $50k, a roof will cost even more probably.
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Jun 16, 2019 05:01
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Just posting today about a completely underwhelming house I went to see. The finished basement had head bonkers for those 5'10”+, which I am. Kind of boring, right?
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Jun 16, 2019 05:10
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EAT FASTER!!!!!! posted:Sanity check: It was built in 2009 so it's likely made out of cardboard and foam as the builders were cutting their losses. Also who pays a million dollars to live in Iowa unless they're buying a 400-acre farm or something?
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Jun 16, 2019 07:48
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EAT FASTER!!!!!! posted:Sanity check: We just closed on 4100 square feet and frankly it feels cavernous. I know there are some people that just value space for having space but you are going to have to seriously ask yourself what a family of four is going to do with all that room. In this case it looks like a significant source of square footage is a 1500 ft+ empty featureless basement set up like a second living room with a second kitchen you are never going to use. As far as style it is what you would call contemporary eclectic, I do not care for it but it is somewhere on the spectrum of inoffensive. You need to give strong consideration to resale, not just the price aspect but also the time aspect when you are 5-6 times above the median home price in your area. Would it be a big problem for you financially if you had to sell the house and it sat on the market for one or two years before you found an interested buyer? The points above about ongoing maintenance are correct and very important although I think $50k to paint is probably quite an exaggeration more like $15k.
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Jun 16, 2019 12:29
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Youth Decay posted:It was built in 2009 so it's likely made out of cardboard and foam as the builders were cutting their losses. How about a house built in North Dakota on a staggering 1.25 acres for over $2 million? https://www.zillow.com/homedetails/3838-2nd-St-E-West-Fargo-ND-58078/98771345_zpid/
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Jun 16, 2019 12:54
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Phuzun posted:How about a house built in North Dakota on a staggering 1.25 acres for over $2 million? Wonder what it costs to heat that place during our week long runs below -15F? Oops, ment to edit the last post.
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Jun 16, 2019 12:57
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BEHOLD: MY CAPE posted:The points above about ongoing maintenance are correct and very important although I think $50k to paint is probably quite an exaggeration more like $15k. You are seriously underestimating the effect of complexity on the cost. There is tons of trim to mask and paint separately. Every window has exterior trim, all the fascia, the deck, everything. I just had my house painted. The exterior area is probably 1/3 of that place or less and it was over 8k. The entire exterior is one color. All trim and fascia, all white. There was basically no masking work. Just spray all day. If I had wanted any different colored trim it would have ballooned the cost. You also have to consider the quality of work expected on a house that expensive. High end paint, high end prep work, etc.
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Jun 16, 2019 14:45
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Phuzun posted:How about a house built in North Dakota on a staggering 1.25 acres for over $2 million? "Time on Zillow 290 days" YOU DON'T SAY
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Jun 16, 2019 14:59
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BEHOLD: MY CAPE posted:In this case it looks like a significant source of square footage is a 1500 ft+ empty featureless basement set up like a second living room with a second kitchen you are never going to use. This house looks like it was built around regularly entertaining very large groups of people. For a very specific person this would be great. Iowa Jay Gatsby maybe.
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Jun 16, 2019 15:40
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Jealous Cow posted:You are seriously underestimating the effect of complexity on the cost. There is tons of trim to mask and paint separately. Every window has exterior trim, all the fascia, the deck, everything. As a side note, as someone who lived in Iowa for some years, you’re probably never going to (directly) pay for a new roof — hail will most likely have your insurance cover it within 10-15 years.
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Jun 16, 2019 15:59
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Cormack posted:"Time on Zillow Exactly my point re: resale illiquidity when you are many multiples of the local median home price, prepared to deal with an empty house for a couple years while you wait for the right buyer to come by. The market of buyers thins out exponentially as price increases.
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Jun 16, 2019 16:14
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Kase Im Licht posted:This house looks like it was built around regularly entertaining very large groups of people. For a very specific person this would be great. Iowa Jay Gatsby maybe. Iowa Jay Gatsby who likes basketball instead of swimming and has never had a carpet hosed up by 50 people walking all over it and spilling food and drink on it lol
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Jun 16, 2019 16:16
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You guys have some bigass houses, Jesus. I'm feeling lonely in my 2900sf three bed
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Jun 16, 2019 17:33
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GoGoGadgetChris posted:You guys have some bigass houses, Jesus. I'm feeling lonely in my 2900sf three bed Yeah, 4k+ sq ft for 4 people is a bit overkill on a day to day basis, but when you have a large family and entertain regularly it starts to make a lot of sense if you can afford it. Basically, I live in the party house.
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Jun 16, 2019 18:06
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Girlfriend and I are moving into a 1600 sqft townhome and it feels like a mansion. I guess when all you've ever lived in over the past 8 years is 700 sqft apartments that tends to happen.
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Jun 16, 2019 19:09
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I had to double check the Iowa house to make sure it wasn't my uncle's. He built a gaudy custom home with an indoor pool about 15 years ago in Iowa and had it listed for about a year and a half last I heard. He owns a bunch of Tobacco hut stores
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Jun 16, 2019 19:20
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Were going from 4 people in 1200sqft to 4 people in 2800 sqft. So much room for activities.
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Jun 16, 2019 19:39
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Popete posted:Girlfriend and I are moving into a 1600 sqft townhome and it feels like a mansion. I guess when all you've ever lived in over the past 8 years is 700 sqft apartments that tends to happen. Ditto, wife and I have been in a 800 sqft apt, and our 1600 sqft home we're moving into has a ~1/3 acre lot that feels like it should have its own zip code by comparison. Kind funny cause I grew up in a ~4k sq ft 3 story house with a finished basement and 3/4 acre lot. That feels like a different life.
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Jun 16, 2019 19:47
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I just asked my parents how big their last house was - the one they moved out of a couple of years ago that we spent 20 years in. At one point we had 7 people living in that house. It always felt so massive. It was 3,100sqft. Who the gently caress needs 4,000? What do you even do with that extra space? I live in like a 700sqft apartment right now and I'm not anticipating moving into bigger than 1,400 when I'm looking next year.
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Jun 16, 2019 20:24
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Hoodwinker posted:I just asked my parents how big their last house was - the one they moved out of a couple of years ago that we spent 20 years in. At one point we had 7 people living in that house. It always felt so massive. It was 3,100sqft. Who the gently caress needs 4,000? What do you even do with that extra space? Start with a bunch of bedrooms and bathrooms, then make them larger than you think they need to be. I've seen a lot of houses with small bedrooms and bathrooms and I would much rather have a bigger house if it meant spacious bedrooms and bathrooms. Around here, the bigger houses in my price range are usually just diced up into more rooms of the same size that you'd find in a smaller house.
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Jun 16, 2019 20:51
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