My Appraisal Came in Lower Than My Offer Price! Now What?
Rates are flat today. Today's comparison mortgage rates with no lender fees are 4.5% on a 30 year, 3.625% on a 15 year and 3% on a 5/1 ARM. (click here for details).
Today I rant a little bit about Fannie Mae's grass cutting budget and answer a viewer question from another Mike in Illinois. Here's what he asked:
"I am buying a house for $300,000 and the appraisal came in at $295,000. What are my options? I don’t want to bring in more money."
I explain Mike's options in today's episode:
So what do you think it costs to just cut the grass on 153,000 Fannie Mae foreclosed homes? How about over $36.7 Million, and that is a conservative number.
Guess who is paying that bill?
You are! Tax payers are on the hook for over $86 Billion since 2008 when the government stepped in to bail out Fannie Mae.
I am no economist, but how about instead of paying someone to maintain theses homes, we have local unemployed individuals getting government support pitch in to help take care of them? Doesn’t that make sense since the government is using resources to help support them during their transition?
The fact is that the government makes it too easy to stay unemployed. If you actually had to work for the government to get a government check maybe some people would take a job they wouldn’t normally take. This would help the unemployment issue and actually get some people back to work even though it may not be the position they'd like.
I know this will not sit will with some people, but I'd like to hear your take on this. If you have a better idea let me know what you think on the comment section below. If you want to check out the full story click click here.
Today's question came from another Mike in Illinois. "I am buying a house for $300,000 and the appraisal came in at $295,000. What are my options? I don’t want to bring in more money."
Mike, here are your options if bringing in money is just not an option for you.
1) You can get released from the offer based on a finance contingency and go find another house
2) You can renegotiate the sales price down to the $295,000.
That is it. It is usually in the best interest of the seller to renegotiate the contract. The simple fact is the next appraisal three months from now may just come in a $290,000 depending on the comps at that time. Thanks for your question Mike!
Hey, if you get a chance, I would love it if you could help me in my mission to bring transparency to mortgage lending by sharing today's episode on Facebook or Twitter. Let's change the way people shop for a mortgage…forever!
See you tomorrow!
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