If You Want To Buy My Dollar, It Will Cost You $1.50
Might as well be blunt.
We all know it's a tough economy, but for those Home Buyer's that are financing a property it can be brutal.
Buyer's start off with their home search in a positive light and looking forward to purchasing a home in this market where home prices are extremely low. They find the perfect home, write an offer and after countering, come to a price that is acceptable to both parties.
They move on with the home inspection and negotiate any repairs with the Home Seller and are satisfied with the outcome. Things are going pretty smooth now and the Buyer's are excited to move towards closing on the property...their New Home.
Then Whammo...The Appraisal comes in SHORT! You think, OK, let's try to move forward and see if the Seller is willing to reduce the price to the appraised Value of the property. You provide the appraisal to the Listing Agent and pull recent comps as a back up to show what the property is really worth in today's fallen market. You also try to relay that any other buyer who is financing may have the same issue with a short appraisal.
At this point the Buyer is emotionally attached to this property and you try to do what you can to to make it work.
Then the Seller comes back with..."I will not reduce the price and will proceed with the negotiated Purchase Price. Mr./Mrs. Buyer has to come up with the cash difference...(even though I purchased this property for much less and will be profiting over $60k, if I reduced the price to Appraisal Value. I want more!)"
Do they think a Buyer will be thrilled to purchase a home and immediately be upside down?
When I am wearing my Buyer's Agent "Hat", I work for the Buyer...I am NOT a subagent...do NOT work for the Listing Agent and most certainly DO NOT work for the Seller! I am the Buyer's Agent!
Yes, I will tell the Buyer what options they have...either pay the difference in Cash or Cancel the transaction with the Appraisal Contingency and look for another property. I most certainly would not EXPECT the buyer to pay a price above what the property is actually worth. And if the difference is such a minimal amount, yes, I would consider foregoing a portion of my commission to have the end result be another Happy Home Buyer moving into their new home. That is how I work...I do what I can to represent my Client and stand by it 100%.
Has this economy made the Greedy even more Gluttonous? Hmmm...
Signed,
True AZ Buyer's Agent
Contact Me if you are looking to Purchase a property in Arizona, and get the representation you Deserve.
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Zenja Darabnia
Direct: 480.223.3594
eFax: 480-302-7859
Email: zenja@arizonahomes411.com
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Those pesky appraisals...They are not a given anymore. Good post.
As a Buyers Only Rep, I'd be delighted to speak to your seller. Guy needs to quit living in the now very distant past.
@Robert Thank you...it was more of a RANT! ;)
@Jon It's difficult when you represent the Buyer and you cannot voice your opinion or facts to the Seller to educate them on the current market. You just deal with it and move on. Luckily I have the praise and loyalty of the Buyer and that's all that counts! ;)
Buyers aren't going to be able to fund their loan on the appraisal. So, the sellers can't really demand the buyers do a thing . . . if I was the buyers' agent, and if sellers didn't want to bring it on down on price . . . we'd be revoking the offer and walking. You're right . . . why move in with negative equity -- even if it's on paper.
My point exactly Carla. Thanks for the comment! ;)
Agents should always thoroughly check the comps and if in doubt, get a value check from a competent appraiser PRIOR to allowing their clients to enter a transaction. In 10 years I've only had about 5 appraisals come in short which is a smalllllll percentage.
Cameron, I agree with you there, as I ALWAYS check/pull comps on a property PRIOR to writing up an offer for a Buyer. However, when a Buyer's Lender requests a Second Appraisal due to the history of the property and that 2nd overrides the first, then what can you do...No Two Snowflakes are the Same.