FHA Low Appraisal

[Anonymous]

Sometimes sellers price them higher than they know theyll appraise for because they dont have enough equity to lower it (turning it into a short sale). It might be helpful to know when they purchased the home and for what price.

[Anonymous]

---

@mkdelight wrote:

We were pre-approved for a FHA mortgage but the appraisal came in $25,000 less than the contact price. Any suggestions or options.

Thanks

---

Same thing happened to me about a year and a half ago. $135K selling price and appraisal came back at $110K. Seller's would not drop price and even had the nerve to suggest that I find another lender to get financing through (and tried to keep my escrow $$ because I refused to do so). That condo just sold, a couple of months ago, for $109K.  

If I were you I'd see if the sellers would drop the price to the appraisal amount. If not...I'd Walk. It would be in your best interest IMO.  

[spuhrmann]

One of my employees was selling a house and the appraisal came in 5K below offer.  Instead of taking the 5K hit and accepting the fact that the house was over-priced he let them walk.  Now he is 3 mortgage payments in on a house his family has moved out of and in the end he will still only get the original appraised value out of it.  It is almost always in the sellers best interest to cast out their ego and take the appraised value.

[mkdelight]

It was purchased about 10 years ago for half what it is valued know.

[mkdelight]

The seller dropped his price $25,000 to the appraisal price.

Thanks all.

[doublespaces]

Sorry to revive this thread, but holy crap! I hope the seller of my house will do this if it comes in low. I'm very afraid it will.

[Booner72]

My appraisal actually came back 7k higher than the agreed on price.  I was told that they randomly pick who the appraiser is these days, and that the lender is not even allowed to talk to the appraiser. 

Good Luck!

[doublespaces]

For ethical reasons I'm glad this is the way it is. In my case I see two situations.

1) The home comes back appraised high and we are all happy.

2) The home comes back low, the seller refuses to pay the 5k closing costs and we eat the difference

3) The home appraises low, the seller refuses to pay closing costs and negotiates the difference

These are pretty much the only two options I see... So basically I need to make sure another 5k is available in my bank account to compensate for these closing costs he is likely no longer going to be paying for me. The home was listed at 220k so we offered him 220k he pays 5k and he came back with 225k he pays 5k. He just amazingly offered to get the termites fixed as well as some repairs on the roof and a fixture in the bathroom. I seriously doubt he is going to eat 5-10k more in appraisal losses at this point considering I think he's borderline about to lose money on his investment.