I got my first duplex under contract for 142k with 8k of concessions (FHA, Owner Occupied). Home was appraised for 134k. Hmmm fishy so I contested with a comp and additional information. 2nd apprasial came back and simply raised it to 135k. Personally this appraisal is low but that eill only help me I suppose when I refi!
I have enough money in my bank account to only spend so much at closing so I am now 7k short. Suggestions on next steps? Make a new offer, or leave the deal?
The Newbie Bryan
@Bryan Cavellier Reduce the price or cover the shortfall with your own cash...which defeats the purpose of using an FHA insured loan...its not worth what you have it in contract for...your lender will only lend up to the appraised amount.
@Brandon Sturgill ok thanks. Its a deal where the number work well for me, just short handed the $7k and didnt know of any options.
@Bryan Cavellier you're limited on seller concessions/contributions on the deal...I've seen a few of these, even with well qualified buyers on conventional loans...the appraisal scene seems to be tightening a bit...I've heard lots of stories lately about very conservative appraisals. It's problematic.
You could potentially look to another appraiser, but in your situation they are randomly selected...and if you pay for another appraisal and get the same result, you're at square one and out $500...total bummer.
Truth is, the seller is going to run into this with the next buyer if you walk...just make sure they understand that the property is not what they think and any other future buyers will not be able to use a bank loan to buy this property...if they won't budge, let it go back on market another month or two and re-introduce your offer...