Just an update on the sale of The Mini House, which is scheduled for later this month (it’s actually a pretty weird story)…
As I mentioned a couple weeks back, we received our fourth offer on this house. The buyer had three contingencies (milestones where she had to finish different parts of due diligence before being locked into the purchase) in her contract: Inspection, Appraisal, and Financing.
The Inspection Contingency was her opportunity to inspect the property, have inspectors come and inspect, etc, and then ask for any repairs or changes that she might want. Her Inspection Contingency was up two weeks ago today, and just before the contingency expired, she had an inspector come in and do a full inspection. He only found a couple minor issues, and in the end, she chose not to ask for any repairs or upgrades.
The Appraisal Contingency was her lender’s opportunity to get an appraisal on the property to ensure that it was worth what they will be lending on it. Their Appraisal Contingency expired last Thursday, and despite repeated reminders to the buyer’s agent to let us know when the appraiser would be coming to the property (we like to be there to chat with him and “help him out”), we never heard anything about the appraisal. In fact, all the buyer’s agent could tell us was that she was trying to push the bank to hurry up and get the appraisal done.
The Financing Contingency is the buyer and the lender’s opportunity to ensure that the buyer is fully qualified for the loan and will almost certainly be approved by the closing date. Their Financing Contingency ended tonight, and would be the last opportunity for the buyer to be able to get out of the contract without losing her $500 deposit to us. Since we haven’t heard anything about the appraisal or the buyer’s financing since last week, my wife called the buyer’s agent today to see what the status was.
According to the buyer’s agent, the appraisal has already been completed and the lender has indicated that the buyer is fully qualified and ready to go with financing. Normally this would be great news, but we know for a fact that an appraisal hasn’t been completed! The only two ways to get into the house would be the key in the contractor lockbox or the key in the real estate agent lockbox. Nobody outside of us knows the code to the contractors lockbox, and the agent lockbox electronically records everyone who has opened it. And according to the records, there hasn’t been an appraiser to the house in the past three weeks.
In fact, just to make sure we knew when the appraisal would be completed, we took the agent lockbox off the house a few days ago. This would force the appraiser to call us to get into the house. We never received a call…
So, we are almost certain that no appraisal has been completed, yet the buyer’s agent is telling us that she spoke with the lender and we’re all set to go in a couple weeks with the closing. Right now I don’t know what to believe, but I’ll be digging in and asking for some more verification of the appraisal and the financing qualification over the next few days…
Crazy!
That’s interesting. Wouldn’t be the first time the buyer’s agent has told a fib to comfort a selling agent. Did you ask for a copy of the appraisal? I always try to get one.
Over here we always counter the deposits to $3,000 – $5,000 or more. It really weeds out the weak buyers and most of the properties we sell the buyer needs $7,000 – $8,000 to close if I am not paying any costs.
Hey Steve –
I’d be really surprised if it were the buyer’s agent lying in this situation…that said, I wouldn’t be surprised if it was the broker lying to the agent. They still have four more weeks before the closing (she didn’t want to close until Dec 31), so the broker may be thinking, “Why spend time and effort on this sale when I still have several weeks…I’ll just put it off for a while and tell them everything is okay…” Not smart on his part if that’s the case, but I’ve seen it before.
We’re going to ask for a copy of the appraisal and a letter from the broker telling us that everything is pretty much ready to go…
As for larger deposits, this house is only selling for $83K, so the total down-payment will only be about $2500. She only wanted to put $500 down, and with it being the holidays, I didn’t expect we’d get any other offers in the meantime, so we said yes. Normally we require $1000 down…if we get screwed, I’ll take full responsibility for being too nice on this one.
Hey J. Scott, is it possible that perhaps they just completed a “drive by” appraisal where they drive by the home and also take the recent comps and call it a day?
I am cooling my heels until after the 1st of the year. But, my revised plan is to target homes that will ARV between $110k and $170k. My experience is there is too much stress dealing with the resources buyers in the under $100k market are using. I thought I had to deal with that price range. But, I have learned my new target range is hotter. It is a little more difficult finding the deals though.
Don
Shae –
Assuming no-one is lying, that’s our best guess. I haven’t had an appraiser do this before, but have heard stories that some HVCC appraisers have been known to not even see the interior of the property. Doesn’t make much sense to me, but if that’s what happened, I’m okay with it (given that we apparently appraised)…
I’m no appraiser, but in my opinion they have not gotten better with all the spotlight they have been under. They have gotten worse and there doing funny numbers with the appraisals to come in low in my area.
They tried to use the house I was refinancing as a comp for the appraisal. I think two appraisers should be able to come within 5% of each other every single time. 15% differences on a 100k house just blows my mind.
Anyway, good luck on this one.
you just have to hope for the best follow though on their promises and good luck.
i wrote you about changes need for the new year your answer moving from under 100k to 110 to 170k is a great idea you know the market better after a year. they will sell quicker because of less seller problems but dont turn down great deals just expect them to settle a little longer and made your profit worth it . so at the 110-170k you are buying at what level?
happy xmas to you and your family chris