Our home appraisal is tomorrow. My husband and I are both on pins and needles about the appraisal. Our house was listed for $214,900, and got two offers for the asking price, one after three days on the market, and the other after five days. We had tons of showings in the few days before it was under contract, and lots of interest even after we stopped showing it. So we know that it was priced correctly for the market. But the appraiser has to agree. And the problem is that the comps in our neighborhood aren’t really all that comparable. Our house backs to open space, and beyond that is a park and an elementary school. There are only two other houses in the whole neighborhood that have the same feature, and they are our neighbors on either side (neither of which has sold recently). We know from our own experience and from the showing feedback that the open space behind our home is a major selling point. But the appraiser will be comparing our home with other homes in the 400-house neighborhood to determine a value, and none of them back to open space.
There are lot of other features that make our home stand out – mostly stuff that we’ve done to it over the years since we’ve been here. Our realtor said that the appraiser will take all of that into consideration, and will be able to add value based on the proximity to the open space and park. We just aren’t sure if it will be enough to balance out the low-ish prices that some houses in our neighborhood have sold for recently.
We’ve agreed to pay $7500 in closing costs for the buyer, which essentially leaves us with a selling price of $207,400. Once we subtract all the fees we’ll have to pay, this will leave us with enough to make our 20% down payment on the new house and pay our own closing costs on that transaction. But if the appraisal comes in lower than $214,900, we won’t have much choice but to lower our asking price accordingly (it’s an FHA appraisal, which sticks with the house for six months. And most loans in this area right now are FHA). We have some money in savings, but we don’t want to use it to buy our new house. We’re keeping our fingers tightly crossed that everything goes ok with the appraisal, but it’s a little worrisome.
The appraisal objection deadline is next Tuesday, so we’ll know by then if we have to lower our price or if things are good to go. Could be a long five days!
alice says
You know you sound like you are an intelligent person, but when you get down to the nitty gritty, you really are an idiot.
You agreed to pay the $7500 closing costs of the buyer?
You’re nuts, madame.
Guess that new broker you hired is really a genius after all? She still gets her 5% commission on the $214,900 price while you and hubby have to cough up almost $10 grand more. And now, you may really have to lower your home price anyway because the other homes in your area are actually worth less. Genius. Looks like your getting the shaft from all ends.
I love it!
What happened? Didn’t her stager get things right? Didn’t her photographs and yada, yada, yada work? Oh, I forgot. She was just interested in asthetics and getting the house sold rather than looking and seeing your foundation sucked. Brilliant.
That ‘broker of the year’, Hall of Famer, Platinum Club broker (the one in business since 1986) tried to tell you about your local housing market statistics over the years but you just wanted him to ‘keep his mouth shut’. The man who sent you birthday cards, anniversary and home anniversary cards couldn’t burden you with his own laments such as the economic state of the union. You just wanted your house sld.
How’s that working out for you?
BTW-that law he couldn’t quote, regarding congress forcing banks to write 55% of the loans to low income people who could never pay (subprime loans) was the Anti-Predatory Laws. Here’s the link:
http://online.wsj.com/article/SB122212948811465427.html
Oh, but I’m sorry. You’re not interested in facts. You just want your home sold for $214K so that you can go buy another home for the same exact sq ft for $214K but has an unfinished basement that you can fix (geeze, you’re really moving UP in the world) and a bigger (ha!) back yard.
So far, Miss Prim lost you $7500 and the story is just getting stared.
I love it!
Have a great day. I’m going to make myself a cup of tea.
FrugalBabe says
Alice, you are a treat :-) You crack me up. In case anyone else is interested, we expected to sell our house for between $205k and $210k. We discussed it at length with the realtor, trying to decide whether we would list it at $210k or $215k (the lower priced houses in the neighborhood had to be factored into our decision). We ultimately decided to set the price at the higher mark and expect a lower offer. We had already decided to accept any offer over $205k. Since the offer we got, including the closing costs concession, was over $205k, it met our requirements and we accepted it. We never expected to get our full asking price with no concessions. So the sale is moving exactly as we expected.
And yes, the house we’re buying is everything we want. Our primary motivation for moving was to get more land so that we can grow most of our own food. We were willing to take whatever we could get as far as the house went, and were pleasantly surprised by what a nice house we’re ending up with (yes, it’s nicer than our current house). The unfinished basement is a total bonus. All we really wanted was the land, and we’re getting that plus a whole lot more.
Thanks for your comment! Have a wonderful day :-)
Jay N. says
Alice, you fit the stereotype for a right winger… cold blooded, mean, and full of fired up opinions based on commentary instead of facts. You watch the Fox News videos, read the WSJ opinion pieces, listen to Rush Limbaugh and get all pissed off without actually hearing the facts. Your WSJ article conveniently left out any democratic legislation that “forced the banks to make the loans.” Can you name the actual legislation Alice? Please don’t give links to FoxNews videos or Rush Limbaugh clips, just give the name of legislation.
I’ll give you some FACTS to research and ask your republican friends about…
– The Republican-led Gramm-Leach-Bliley Act of 1999 (opposed by Barney Frank) which removed the wall between commercial and investment banks and which contributed to the proliferation of the complex and opaque financial instruments which are at the heart of the crisis.
– The repeal of Glass-Steagall
– Freddie Mac paid Republican consulting firm DCI $2 million to kill legislation that would have regulated and trimmed Freddie Mac and Fannie Mae, three years before the government took control to prevent their collapse. Your opinion piece writer in the WSJ left out that info, and I don’t think it was something she just forgot.
Conservatives will cite the Community Reinvestment Act as having something to do with the financial mess. But the CRA had nothing to do with telling banks what sort of risks they should take, it simply prohibited “redlining.”
Mary says
Wow! Congratulations on moving your house so fast frugalbabe! Ignore mean spirited people like Alice, they’re insecure and being mean to others is all they know. My sister has had her house on the market for over a year and they haven’t even gone under contract once. I’m glad it’s working out so well for you. I guess the “hex” Alice put on your house was a dud?
Oh well, remember what G.W. Bush said… “America, love it or leave it.” I guess if the anti-american people like Alice aren’t happy with their country, they have a choice.
Kacie says
When we were briefly in the market for houses, our realtor explained to us how seller concessions work (which is what you are doing).
It seems to me that for you to “pay” $7,500 of their closing costs, they should be offering you $222,400 for you to break even on that deal.
By you “paying” their closing costs, they’re just asking permission to finance their closing costs.
So since they are offering you a full asking price BUT they want $7,500, it’s the same as if they just put in an offer of $207,400 and paid their own closing costs.
Now, if your house appraises for less, you might not be able to “pay” the closing costs (their mortgage won’t let them finance more than the house is worth) so you might have to find another buyer.
I hope I’m making sense! If not, email me.
FrugalBabe says
Kacie,
Your little guy is adorable! We started our son on pureed food at five and a half months too. Best of luck with your move to your new place with a washer and dryer!
As far as our house goes, we never thought we’d be able to sell it for $214,900. That was our asking price, because we assumed that we would get a lower offer. The lady who is buying it is only putting $1000 down. She’s combining an FHA loan with another loan to cover the rest of the purchase price. So we assume that she has very little cash to bring to closing. Thus it makes sense why she needs to finance her closing costs.
The problem with increasing our price to make up for the closing cost concession is the appraisal. We’ve been concerned about the appraisal from the very beginning. When we first met with our realtor, she took us around to look at other houses that are for sale in our neighborhood. Most are selling for less than ours. Some were on the market for more, but they haven’t sold yet, and thus won’t be counted in the comps that the appraisal takes into consideration. There is no way that our house would have appraised for anything more than we listed it at, and it might not even appraise for the list price.
The problem with finding a new buyer is that the current buyer is using an FHA loan. So it will be an FHA appraisal, which will stick with the house for six months. So if it appraises low and we decide to back out of the deal, we’d have to put it back on the market with “conventional only” as the financing arrangement. Our realtor said that more than 80% of the loans in our metro area right now are FHA, which means we’d be basically killing our chances of selling if we excluded FHA financing.
So… we pretty much have to go with what the appraisal comes back at. If it’s close, we can make up the difference with our savings. If it’s ridiculously low, we’d have to rethink this whole thing – but we don’t anticipate that.
Geoff K says
Jeez Alice, why do you even read Frugal Babe’s blog? I imagine most people read it because they enjoy tales of greeness or frugality, or like her like I do and want to follow her story. You seem to follow only in the hope something bad will happen. *Warning* If you continue this behavior you will sprout vast amounts of hair, develop a large hump on your back, grow warts and turn into a fully fledged troll!
joanna says
When we bought our house, it was similarly hard to appraise- a 100-year-old farmhouse on an acre in the middle of cookie-cutter suburbia- and ended up being compared to houses that were the same age, but in the middle of the city with no lot. The appraisal came in lower than the (we thought, very fair) price we offered. Great for us- the sellers had to lower the price- but we were buying the house from friends, so we felt their pain, too. Here’s hoping the price on your house is set right, and all goes well!
And, I’m sorry for the critical comments you’re getting! Thanks for writing. Many others appreciate it.
Kay says
Ignore the trolls. They go away when they are not fed. [You ignored the above troll very graciously, I’m proud to know you! :)]
Good luck with the appraisal.