Seller not responding with 2 weeks until closing
Springfield, IL · Member since 2016 · 19 posts · 1 vote
Seller not responding with 2 weeks until closing
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Rental Property Investor · Saint Cloud, WI · Member since 2016 · 186 posts · 63 votes
9yIt's difficult to understand all that you have in front of you, the intangibles so to speak. And, you know the facts. Unless its a cash offer, the house will sit. Banks won't go over appraised value.
It also appears that you may be emotional and frustrated over this deal. Anyone would be. But, here's the key. Keep emotions out of it and walk away. The owner may feel you'll come up more. When you don't, they may become fearful of losing your deal. Then, guess who has the upper hand? You do. Bring the right mindset to this deal. Pay attention to your gut. If you've been calling, stop. See what happens....
15 Replies
- Real Estate Broker · Springfield, IL · Member since 2014 · 7 posts · 1 vote9y
You should call a local real estate broker to help you. I am assuming you are not currently using one? A real estate brokers job when working with a buyer is not necessarily finding a house. We can show you all sorts of houses, but you will ultimately pick what you want. The biggest part of the brokers job is to make sure you get to closing on the house that you picked.
- Springfield, IL · Member since 2016 · 19 posts · 1 vote9y
Originally posted by @Account Closed:
You should call a local real estate broker to help you. I am assuming you are not currently using one? A real estate brokers job when working with a buyer is not necessarily finding a house. We can show you all sorts of houses, but you will ultimately pick what you want. The biggest part of the brokers job is to make sure you get to closing on the house that you picked.
Only my real estate agent. Will the broker actually come up with a settlement? I do not want to invest any more into this if the deal ends up breaking. How much do they generally cost?
- Real Estate Broker · Springfield, IL · Member since 2014 · 7 posts · 1 vote9y
I am sorry, I do not believe I understand. So you are working with an agent at the moment on this deal? Is this a For Sale By Owner? Also, the cost is usually a percentage of sell price. It should not cost anything if the deal does not close.
- Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes9yAlex Siravo - Put yourself in the seller's shoes. 1. Did you make an offer for X price? Yes. 2. Did anyone force you to do that? No. 3. Did the seller have other opportunities / offers / pending house showings to other buyers before you signed and agreed to a contract for X price with them? Yes 4. Does the seller think their house is worth at least X price? Yes 5. Can real estate appraisers be methodical and slightly off market values? Yes - a different appraiser would likely have a similar but different market value report for this house. If prices are rising from multiple offers/high demand, appraisals will be often be lower than market / sale price. 6. Does this house have features you like over other houses such that it is worth X to you? Yes/No? If your contract is contingent on financing/appraisal, you can get out because your lender can write a letter saying you weren't approved for the loan (given the appraised value of the collateral). If your offer is not contingent on financing/appraisal, you have a binding contract (subject to any other contingencies) and will be expected to come to settlement with all the $$ and get the keys. If you want this house, you said before to the seller that it's worth X to you. You can A) come up with the 10k cash differential at closing to pay X price given your loan on the appraised price. B) try to see if the seller will lower his/her price to the appraisal. The seller views this as shady. Seller may cancel because you've cancelled. Seller may put house back on market and might sell end up selling for less than appraised value, but not likely to you. Or they might sell for X or more to a buyer with enough cash at closing. C) meet the seller 'halfway' where you pay above appraisal and the seller accepts less than X. Good luck. Let us know how it goes.
- Springfield, IL · Member since 2016 · 19 posts · 1 vote9y
Originally posted by @Natalie Schanne:
Alex Siravo - Put yourself in the seller's shoes.
1. Did you make an offer for X price? Yes.
2. Did anyone force you to do that? No.
3. Did the seller have other opportunities / offers / pending house showings to other buyers before you signed and agreed to a contract for X price with them? Yes
4. Does the seller think their house is worth at least X price? Yes
5. Can real estate appraisers be methodical and slightly off market values? Yes - a different appraiser would likely have a similar but different market value report for this house. If prices are rising from multiple offers/high demand, appraisals will be often be lower than market / sale price.
6. Does this house have features you like over other houses such that it is worth X to you? Yes/No?If your contract is contingent on financing/appraisal, you can get out because your lender can write a letter saying you weren't approved for the loan (given the appraised value of the collateral).
If your offer is not contingent on financing/appraisal, you have a binding contract (subject to any other contingencies) and will be expected to come to settlement with all the $$ and get the keys.
If you want this house, you said before to the seller that it's worth X to you.
You can
A) come up with the 10k cash differential at closing to pay X price given your loan on the appraised price.
B) try to see if the seller will lower his/her price to the appraisal. The seller views this as shady. Seller may cancel because you've cancelled. Seller may put house back on market and might sell end up selling for less than appraised value, but not likely to you. Or they might sell for X or more to a buyer with enough cash at closing.
C) meet the seller 'halfway' where you pay above appraisal and the seller accepts less than X.Good luck. Let us know how it goes.
Yes I am forced to do that because my lender only finances the appraised value. I am not paying more than the house is worth. We already offered below what the appraised value was initially, but the seller was greedy and upped the price. On top of all of that the seller posted on their facebook page they put only $40,000 into the house and are trying to make over $50,000 profit . It is shady for the seller to not respond after 4 days, it is actually ridiculous. I am putting myself in the seller's shoes and I would come up with an answer within a couple days. Completely unprofessional seller here. Either they accept the offer or counter, but sitting on this waiting is wasting both of our time, WHEN WE ARE EXPECTING TO MOVE IN NEXT WEEK. The appraisal is going to remain the same for months after the fact if we walk.
- Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes9y
@Account Closed The seller thinks his house is worth every penny you offered to pay him, regardless of the appraisal amount. "What the house is worth" is subjective, even to the appraiser.
What you can do:
- Ask your buyer's agent to ask the listing agent if the owners/sellers wish to negotiate a suitable deal with you by X time or that you are cancelling your contract due to clause #. Ask your buyer's agent to explain your contract and your choices to you.
-- At $10k over appraised and 80% conventional financing, you probably have at least $2k more cash available. So you can offer up to appraisal + $2k cash as purchase price if you really like the house.
In your advantage:
- Vacant properties cost $$. People are usually willing to negotiate for a few thousand dollars to close sooner.
- If the person stands to make so much money, he might be willing to take a little less to have cash in hand.
To your disadvantage:
- If the seller has strong external interest in the house, the price might go even higher if your contract falls apart. It's getting to the March/April/May Spring selling season. He may have already received some backup offers. There's nothing preventing him from making $60k or $70k off the next buyer instead of $50k off you.
Supply and Demand.
Keep us updated.
- Springfield, IL · Member since 2016 · 19 posts · 1 vote9y
Originally posted by @Natalie Schanne:
@Account Closed The seller thinks his house is worth every penny you offered to pay him, regardless of the appraisal amount. "What the house is worth" is subjective, even to the appraiser.
What you can do:
- Ask your buyer's agent to ask the listing agent if the owners/sellers wish to negotiate a suitable deal with you by X time or that you are cancelling your contract due to clause #. Ask your buyer's agent to explain your contract and your choices to you.
-- At $10k over appraised and 80% conventional financing, you probably have at least $2k more cash available. So you can offer up to appraisal + $2k cash as purchase price if you really like the house.
In your advantage:
- Vacant properties cost $$. People are usually willing to negotiate for a few thousand dollars to close sooner.
- If the person stands to make so much money, he might be willing to take a little less to have cash in hand.
To your disadvantage:
- If the seller has strong external interest in the house, the price might go even higher if your contract falls apart. It's getting to the March/April/May Spring selling season. He may have already received some backup offers. There's nothing preventing him from making $60k or $70k off the next buyer instead of $50k off you.
Supply and Demand.
Keep us updated.
They had their original appraisal done with a comp over 2 miles away giving them the appraisal of $170000 over our fha appraisal with a comp 1 mile away of $150000.
I agree they think the house is worth more than it is appraised at. I think the square footage of the house makes it not worth the extra amount and that our appraisal is far more accurate. It is a small house with not much space the only reason we liked it is because it was refurnished and somehow managed to fit 4 beds and 2 baths. However, like you said more offers will likely come around spring time, if they haven't already.
We gave them until tomorrow to give us an answer because almost a week away from settlement and not hearing anything from them is ridiculous. Unless they want to accept our offer (which is unlikely) or give a reasonable offer in return, we have much bigger and nicer homes lined up for this weekend.
I will follow up when it's final... appreciate your input.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes9y
The seller is well within their right not to respond, and very well may be doing so strategically. If you have an appraisal or a specified financing contingency, there is likely a a time constraint associated with it and that clock is ticking down. Once you get past that contingency, then you may not have an out on the contract.
Also was this property a FSBO? A FSBO is always going to appraise low because a private seller does not know how to work with the appraiser or speak their language. This is a huge factors in why FSBOs dont sell. About 90% of FSBOs end up having to list with an agent, and here is a perfect example of why.
Also i would hardly say putting in $40k to get $50k is being greedy.
District Invest Group545 Reviews - Rental Property Investor · Saint Cloud, WI · Member since 2016 · 186 posts · 63 votes9y
It's difficult to understand all that you have in front of you, the intangibles so to speak. And, you know the facts. Unless its a cash offer, the house will sit. Banks won't go over appraised value.
It also appears that you may be emotional and frustrated over this deal. Anyone would be. But, here's the key. Keep emotions out of it and walk away. The owner may feel you'll come up more. When you don't, they may become fearful of losing your deal. Then, guess who has the upper hand? You do. Bring the right mindset to this deal. Pay attention to your gut. If you've been calling, stop. See what happens....
- Springfield, IL · Member since 2016 · 19 posts · 1 vote9y
Originally posted by @Shane Baganz:
It's difficult to understand all that you have in front of you, the intangibles so to speak. And, you know the facts. Unless its a cash offer, the house will sit. Banks won't go over appraised value.
It also appears that you may be emotional and frustrated over this deal. Anyone would be. But, here's the key. Keep emotions out of it and walk away. The owner may feel you'll come up more. When you don't, they may become fearful of losing your deal. Then, guess who has the upper hand? You do. Bring the right mindset to this deal. Pay attention to your gut. If you've been calling, stop. See what happens....
I completely agree. I know my emotions came into play due to the appraisal coming in with two weeks left and all this time I was planning the move. Not to mention I really do like the house. My fiance has been ready to walk away since we received the appraisal, which helped me see this through a different scope. Very likely we are walking away tomorrow night because I doubt we will hear back from them.
That's how I know they are playing a game with us, because they would have backed out if they didn't want the deal. The fact they are stalling this tells me they want us to give in and pay the full closing. I agree walking away is the best move here.
We will see.
- Springfield, IL · Member since 2016 · 19 posts · 1 vote9y
Originally posted by @Russell Brazil:
The seller is well within their right not to respond, and very well may be doing so strategically. If you have an appraisal or a specified financing contingency, there is likely a a time constraint associated with it and that clock is ticking down. Once you get past that contingency, then you may not have an out on the contract.
Also was this property a FSBO? A FSBO is always going to appraise low because a private seller does not know how to work with the appraiser or speak their language. This is a huge factors in why FSBOs dont sell. About 90% of FSBOs end up having to list with an agent, and here is a perfect example of why.
Also i would hardly say putting in $40k to get $50k is being greedy.
We were thinking it was their strategy to get the most out of us, they likely assume we are emotionally attached to it and will do whatever we can to get it. If we do have the contingency you speak of, how would we come to an agreement? Or does that mean I would lose the money deposit?
They a flipping company, so I assume this is not considered an fsbo unless I am incorrect in that assessment.
They bought the property for 85k put in 40k for 125k total and are trying to sell it for 175k, that's what I meant by 50k profit.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes9y
Originally posted by @Account Closed:
Originally posted by @Russell Brazil:
The seller is well within their right not to respond, and very well may be doing so strategically. If you have an appraisal or a specified financing contingency, there is likely a a time constraint associated with it and that clock is ticking down. Once you get past that contingency, then you may not have an out on the contract.
Also was this property a FSBO? A FSBO is always going to appraise low because a private seller does not know how to work with the appraiser or speak their language. This is a huge factors in why FSBOs dont sell. About 90% of FSBOs end up having to list with an agent, and here is a perfect example of why.
Also i would hardly say putting in $40k to get $50k is being greedy.
We were thinking it was their strategy to get the most out of us, they likely assume we are emotionally attached to it and will do whatever we can to get it. If we do have the contingency you speak of, how would we come to an agreement? Or does that mean I would lose the money deposit?
They a flipping company, so I assume this is not considered an fsbo unless I am incorrect in that assessment.
They bought the property for 85k put in 40k for 125k total and are trying to sell it for 175k, that's what I meant by 50k profit.
I dont know the specifics as to the details of a Pennsylvania contract, but in many locations if you blow past your contingency dates you could either lose your deposit, or be sued for specific performance, or sued for damages. The latter two are unlikely, while losing your deposit is a very real possibility in many markets. Hopefully you are working with a good agent who is well aware of the timelines if they are specified in your contract.
Doing the simple math of acquisition and selling costs, hard money charges....those numbers equate to a $27,000 profit before accounting for things like marketing costs to locate and acquire the poprert. Not exactly a huge sum of money.
District Invest Group545 Reviews - Springfield, IL · Member since 2016 · 19 posts · 1 vote9y
Update:
Seller finally responded and they are extremely upset about the appraisal and want us to pay all closing costs as well as pay for another appraisal, HA! My agent told them we are not paying for another appraisal and unless they want us to walk away, they are paying full closing on top of the appraised price. Looks like we have the upper hand here.
On top of that, we found a much bigger and nicer home (even includes a pool), nearby and our agent is very close with the seller. We are visiting tomorrow and are a lot more motivated to walk away from the current house. The only reason we are keeping the deal alive is a backup plan (in case the house we are seeing tomorrow is too good to be true).Keep yas updated. I appreciate everyone's input.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
you don't have the upper hand... you simply have the right to walk away.. which it sounds like your going to do... sales fail every day for this exact reasons.. and its one reason why many sellers in todays market won't sell FHA as the appraisals many times come in low just like this one.. If I was seller I would just say fine and move on to the next buyer... and in your case just move on to another home not a lot of drama here just business.
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