Wednesday, April 11, 2012

Womp Womp...

A huge bump in the road was hit last night and now we might not be getting the house.

Turns out there are more hoops to jump through than ever to buy a house. Many of these have nothing to do with your skills in negotiation or your willingness to throw money at the issue. No. This bump in the road my friends is the appraisal.

Do you want to know what an appraisal is? Because I sure know a lot more about them than I used to. An appraisal is the process that you must go through in order for your loan to be approved by the bank. It is how the bank verifies that the loan you about to take out is not going to be for more than the actual value of the home. In the old days (circa 2008) when you got an appraisal the appraiser would be hired by the financial institution to go figure out if the home is worth what the buyer said they were willing to pay for it. What was happening was the appraisers were kind of “in bed” with the lenders. They were possibly bumping up the value of the home in order to ensure that the loan would go through, even if the house was not worth that. So what happened was when those people who paid for more than what the house was worth back in 2008 went to sell in 2010 they were upside down on the value of their house and could not sell. Now they are in foreclosure. Now life sucks.

Fast forward to 2012. Now when you go to have an appraisal done on a house the appraiser is hired by what they call an AMC. These AMC’s (appraisal management companies) are separate from the financial institution and therefor keep the appraiser from being “in bed” with the banks and there for not bumping up the value of the home in order to just close the deal. Well this new protection worked. It worked so well in fact that now our loan might not go through because the appraisal came back $13K less than our offer on the house.

So what do we do next? We wait? Our REALTOR has sent the seller’s agent a copy of the appraisal and told them they have to come down $13K in order for us to close. This issue is we know that the sellers will be upside down on their loan if they do this. We don’t think they will. And we think that they might end the contract, and we will have to walk away from the house. After all of this we still might lose this house. This SUCKS!

I will have an update hopefully tomorrow. The sellers are mulling it over as we speak.

1 comment:

Melizza said...

Keeping my fingers crossed for you guys!