I recently wrote a contract on a Redford home for one of my clients. It was a beautiful newer Redford home. In the contract we asked and the sellers accepted 6% sellers concessions. The sellers were going to pay for the closing costs, including the appraisal.
Well my client got the mortgage started and the appraiser went out to visit the house. Well the appraisal came back and it was $10,000 to low. There just were any homes (comps) in the area recently. So the bank's appraiser came back lower than I believe the house was worth. Thanks to the guy that thought of HVCC. Unfortunately the seller could not go lower. They owed too much on the mortgage and did not have any money to come to the table with. They didn't want to do a short sale either.
So the Redford home sale was DEAD!
The sad part is that my buyer had to pay for the appraisal out of their own pocket. No mortgage company in Michigan will start a mortgage without the appraisal being paid for. But what my client didn't realize is that the seller will not pay for the appraisal if the home does not close.
My client thought they would get their money back. But it the mortgage does not close the seller is not going to pay for any costs.
So you as a Redford home buyer could be out of pocket for
- The appraisal
- Any inspections you have done
even if you have the seller paying for the closing costs and the sale does not close.
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