Well, I am contractually signed in Backup Position for the James St house. The Seller accepted a good offer from an owner/occupant with conventional loan. The buyer has a high down payment, so the bank appraisal should not be an issue. I know the bank appraisal will come in low because of the condition of the house but the buyer has the funds to make up the difference. But where the Buyer may walk is because of the inspection. The house has some serious issues. When the Buyer realized that the Seller will do no repairs, they tried to come back with a lower offer price.
The buyer has only 7 days to remove all contingencies. That is a short time period to get through inspections, appraisals and preliminary loan approval. The listing agent insists she is going to make them stick to that contingency release. So, I will know if I am in position by next Friday.
They received many offers, but I got into 2nd position because my offer was the cleanest with no contingencies at all. I even put in language that I would clear the house of any remaining abandoned personal property from the tenants. That was the language that sealed the deal because Seller is a trustee out of town and he didn’t want to deal with having to come down and clear out the house. Also, all the other offers were sight unseen, there would definitely been in changes in their offer after viewing the house.
All banks we dealt with would not lend any money unless the appraisal came in matching or above the purchase price, not the loan amount plus some cushion - no matter how much the down payment was.
So hopefully there will be some pushback on that front from the lender… seven days is an awfully short period of time for removal of all contingencies.
If I were the prospective buyer, I’d be very very nervous. I agree with BunsenBurner; seven days seems awfully short. Whatever – we’ll just have to wait out the week.
Usually the bank will provide the loan, but only up to 80% of their appraised value. So, if the purchase is contracted at $700,000 but the appraisal comes in at $600,000 they will only loan $480,000 for the house, versus the $560,000 the buyer might have been hoping for. Since the buyer has a large down payment they have the funds to make up the $80,000 difference and close the loan.
The iffy part is if an appraiser declares the house is not liveable. Or, they could require a lot of retrofits for smoke alarms, water heater bracing, etc. that usually falls on a seller to fix for the buyer to get their loan. This Seller is doing no repairs
Our lender wanted no part of that game. Appraisal at the purchase price even though our down payment was more than 50% and out credit scores were more than good. Hope theirs is as strict.
I just got the bad news that the main buyer released all contingencies last night and is proceeding with the sale. The buyer is heading off to a planned vacation so I’m guessing she was pretty stressed out.
So I will just keep looking. Nothing new on the horizon
Yikes on the Zillow flipping program. Not sure how it will compete for homes if they are “partnering” with real estate brokerages since that is not eliminating any commissions that the Seller would have to pay.
Although I don’t know the details, I’m guessing they will pounce on those “buy me” flags that owners can post on their properties. But those Owner values are always ridiculously high and unrealistic.
