Negotiate after appraisal - Is it possible?

Hi Juanita,

There is no harm in negotiating with your lender for a favorable selling price. If you have an agreement with the lender regarding what needs to be done if the appraised value of the property is lower than selling price, then you would have a better chance to negotiate. If the lender had not received any other offer, then he may be ready to negotiate the selling price.

In case, if there are other offers, then the lender will not be ready to negotiate the selling price with you. He would get other buyers who would purchase the property giving that extra amount. In that situation, you should look out for some other deal.

Take care

I noticed you never specified if the appraisal was above or below the sales price. Many contracts have contingencies built in such to allow you to renegotiate or cancel the contract if the appraisal is below the sale price or if you fail to obtain financing. Otherwise, your contract is legally binding and they have a legal right to require you to complete the purchase as agreed. Although very uncommon, they could go as far as to sue you for breach of contract if you choose (on your own) not to buy the house at this point. They may be willing to renegotiate but what would be their incentive at this point if you are already pre-qualified for the loan and the appraisal is at or above the sale price? I am not trying to bust your bubble, but you may need to look at it from their perspective.

Having said that, the likelyhood that they would ever go to these lengths are very slim. They do not want to waste time with law suits, they just want this asset off of their books. So, you might have a chance, but don't be surprised if they say no.

i'd think that you would have signed a contract that would give you the "out" if the value of the home, as appraised, is less than the purchase price. if your contract holds you to the originally agreed-upon price, methinks you're stuck.

I agree, you may be "stuck". However, if you want out of the contract you can still accomplish this. You still need a home INSPECTION. This will reveal all of the things that are potentially wrong with the home. At that point, you could ask the homeowner to fix EVERYTHING on the list. Most likely they wont and you will be at a stalemate. Then if both parties do not agree, you can most likely walk away.

in connecticut, inspections are typically done prior to an appraisal. that, for many peoole, allows them to keep their funds on hand in case there are issues that may not be resolvable, and delay paying for an appraisal that may ultimately not be needed.

You should offer only what you think is reasonable. The Appraisal is a point estimate, typical required by most lenders, in reality a lender with an ounce of brains trying to sell a property in todays market, even with a current Appraisal (say under 30 days) should entertain offers within 10 percent. But not all Appraisals are correct, nor do all lenders have brains either. Many lenders out there add insult to injury to us, you, me, the tax payers and hire the cheapest Appraisers with the lowest qualifications because they can be easily manipulated and willing to work for ridiculous low fees and turn times. You would think a lender with integrity and brains, would after being burned with many bad loans and perhaps prior bad appraisals, would have learned their lesson, but sad to say most don't and they keep hiring often times the dumbest ones they can find (not all the time, just more than not). My hope is that those same fools (lenders) will choose their heart surgeon the same way.

wow...that's a harsh ending to your post. i happen to agree with you that there are far too many foolish lenders who wish to cut corners, and, consequently, fail to recognize the realities of the market. however, i also believe that this is something that is probably short-lived at this time, and lenders are more regularly facing reality as it concerns short sales, etc.
i hope your heart surgeon won't get chosen by any of the lenders you've noted.

Haha, let's just hope your heart surgeon isn't hired by a Medical Management Company!

IF it is good for the Goose it should be good for the Gander. How many lives are being destroyed by lenders and AMC's that do not care about honesty, integrity, accuracy and have no respect for the Appraisal process at all and their actions contribute to making the process far less accurate than it could be. Thus, yes I hope they choose their hear surgeon the same way.