I can't sell my house!

[cdcengineer]

Looks like the guy offered $12k less than Badal's bottom dollar number. The appraisal was $10k lower than his bottom and the guy offered $2k less than that. That's a bit more than he may want to drop. But, if the appraised value is what this guy needs to finance, than you may not be able to get any more than the appraised value. He hasn't even tried to beat you down following items he finds during inspection. That might even make it tougher.

Good Luck

 

[Supe]

Looks like the guy offered $12k less than Badal's bottom dollar number. The appraisal was $10k lower than his bottom and the guy offered $2k less than that. That's a bit more than he may want to drop. But, if the appraised value is what this guy needs to finance, than you may not be able to get any more than the appraised value. He hasn't even tried to beat you down following items he finds during inspection. That might even make it tougher.

Good Luck

I stand corrected, I initially read that as he went $2k under Badal's asking price. But I agree on that statement - many lenders will not finance a loan that exceeds the appraised value. Not to mention, most buyers don't want to go into a situation upside down, and I'm not sure how rules for LTV loans, etc, would apply in the case of a new purchase as opposed to refinancing.

 

[willsee]

The buyer is probably not financing the whole thing.

If it were me I would take the offer. You have a different house that appeals to a small market of people and hopefully this is a legit offer from a legit buyer. I would sell and move on with my life.

When we were buying a house here we made an offer on a home that was selling for 20k MORE than the appraised value and 30k MORE than what the house sold for right across the street. We offered fair market value (and then some) but the seller didn't budge. We moved on and bought another house and that guy is still trying to sell his.

 

[Dexman PE PMP]

The appraisal really ties your hands on this one.

If the buyer is using FHA, they absolutely will not finance anything above the appraised value. Then, depending on how much $ the buyer has available for a down payment, he will also be limited on how much he can offer.

The absolutely highest LTV any bank will finance is 96.5% through an FHA loan. So, if it appraises for $400k, the most he could finance is $386k. Then, if he only has $12k for a down payment, he may be forced to offer $398 so he could still hit the LTV numbers (hence the $2k under appraised value offer).

I think your best case scenario is to counter with the amount of the appraised value. The only other option would be to hire another appraisal company and hope it comes in higher.

It does put you in a tight spot with your money down situation, but there are options where the bank will finance a higher rate if you pay mortgage insurance. I'm not going to lie, mortgage insurance is an expensive rip-off. You end up spending thousands of dollars up front, then hundreds of dollars each month, just so the bank is protected. I know current FHA insurance rates are to the tune of 1.2% up front and 1.2% per year (depending on the LTV it can be a little higher or lower), which equates to $1200 up front and $100/month for every $100k financed.

I'm not a familiar with non-FHA loans as that's all I've dealt with recently (including my current refinance).

 

[snickerd3]

even mortgage insurance varies by banking institution though...it isn't always you reach 20% you are done. Some are 20% PLUS a min of 2 yrs...have several friends with this scenario. There are on the hook for MI payments for 2 yrs even if they paid the $ to reach 20% a month after they signed the bottom line.

 

[snickerd3]

I do agree with the dex that the appraisal puts a kink in things.

 

[Capt Worley PE]

What Dex and Snick said.

Bottom line: Buyer doesn't really care what you want, only what the house is worth.

Methinks you might better rethink the finacing on the new home side and let this one go for less than you want.

my $0.02.

 

[Dexman PE PMP]

even mortgage insurance varies by banking institution though...it isn't always you reach 20% you are done. Some are 20% PLUS a min of 2 yrs...have several friends with this scenario. There are on the hook for MI payments for 2 yrs even if they paid the $ to reach 20% a month after they signed the bottom line.

Yep. FHA says you have to pay a minimum of 5 years. However, after the 4th year you can have the house re-appraised (on your own dime) and if it comes in higher, then they can waive the 5th year. Also, FHA says you owe until the LTV is below 78%, not 80.

These are set by the FHA, not the bank. But if you don't have an FHA loan, then you default to whatever rules the bank sets.

 

[willsee]

I got a conventional with 3% down and I have to pay PMI until the house reaches 80% of the original purchase price, not the appraised value.

 

[Supe]

Wow, that sucks! I was (briefly) looking into PMI, and my lender said I would have been off the hook when I hit 20%, no other stipulations.

 

[goodal]

I was just told it had to be on there for a year with the lender Im talking to.

 

[pbrme]

My PMI is based on a LTV of 80%. I'm getting ready to refinance, as the IR is a whole point lower than when I bought. So if the new appraised value is higher, than that's instant equity for me.

 

[Dexman PE PMP]

My PMI is based on a LTV of 80%. I'm getting ready to refinance, as the IR is a whole point lower than when I bought. So if the new appraised value is higher, than that's instant equity for me.

Yep. I am in the process of refinancing as well. I'm looking to drop 3/4 of a point. We are having it appraised today, and we're hoping it appraises for higher so that it puts us closer to the 78% mark. Plus, if it appraises for $5k more than what it originally appraised for last year, our PMI rate drops by a tenth of a percent.

 

[goodal]

Well I guess I was wrong. I CAN sell my house. We closed on ours a couple weeks ago and our future house last week. I got a 3.25% APR on a 30yr loan. As long as I keep getting a paycheck,I dont think I could have timed that any better. :bananapowerslide: :bananapowerslide:

 

[Capt Worley PE]

Congrats, badal!

 

[MA_PE]

congrats badal. good luck in the new home.

 

[Ble_PE]

Good to hear, badal. Congrats!

 

[Dexman PE PMP]

Awesome news!!

 

[FLBuff PE]

Glad to hear it, man! The house next door to us is closing today, and many of the houses in my neighborhood are starting to sell, for about asking price or just under. Granted, asking price is a LOT less than it was in '08, but I think the asking price is more in line with what it should have been all along.

 

[pbrme]

WooHoo, that's great news! Congrats man!

Time to celebrate :beerchug: