I am currently representing a couple from out of the area moving to Glens Falls. We found a 2 family that would be perfect for their needs as the couple would also like to bring along one of their parents. We wrote an offer , and it was accepted , but immediately there were concerns over the pending appraisal. The seller was concerned that the appraisal figure may not be high enough to cover the sellers concessions requested by the buyers. the buyers actually agreed to forfeit the seller concession if the house did not appraise for the amount they were requesting, which I felt was a pretty stand up thing to do.
As it turned out, the house actually appraised for $9000 less than contract price. The buyers again agreed to compromise and offered $4500 over appraisal, which was essentially half of the difference. The seller refused, evidentally feeling that he didn't care what the banks felt his home was worth or that any would be buyer would have to pay cash for every nickel over appraisal value.
The end result of this is the buyers are entitiled to their deposit back, but they lost $400 on the inspection and paid another $450 for an appraisal. The seller just got a FREE inspection and appraisal. He also got FREE advise from the real estate brokerage and the attorneys.
Is the listing agent responsible? I don't think so. Realtors work to do the best job they can do for their clients. The last thing a Realtor is trying to do is give away the seller's property. The reason for this opinion is Realtors make a living on service, loyalty and long term relationships and regardless of any buzz out there, 99% of Realtors want to do a great job for their clients. In this particular case, the listing agent had obviously discussed the issue of appraisals with the seller or else it would not have been a factor in negotiations.
What is left for the selling agent? In this case I was able to retain the buyers and we are continuing to evaluate property but now with the new danger that if the new property does not appraise and the seller will not compromise , more money will be lost to inspections and appraisals.
And what of the seller? Aside from my carving an image of the seller with his name on it , and dropping it in a deep hole in my back yard, he will sit with this house for a year or two and my prediction is that he will eventually sell it for less than what my buyers offered.
Perhaps the new real estate contracts should require sellers to reimburse buyers when the house fails to appraise. What are your thoughts?