What doesn't kill you makes you stronger... One-Two-Three-Four-Close!
This is a true real estate story that happened just last year involving
- ONE home and one buyer,
- TWO lenders,
- THREE appraisals and
- FOUR months time from contract to close... And it was not a short sale.
One of my listings received an offer that was accepted by the seller. Buyer was going to use VA financing and although he was in contact with a local mortgage broker decided to go with an out-of-state lender after doing some Internet rate shopping. (note: if you happen to be a buyer reading this, you will find out why this Realtor recommends to work with a local lender)
Inspections went well, communications with lender seemed reasonable although it was not always easy to reach the loan processor. Finally, the appraisal was ordered and came back $1000 above purchase price. Buyers and sellers are preparing for their respective upcoming moves.
A few days before closing date, the title company seems to have problems getting information from the lender regarding the closing package. Then, communication from the lender fell silent. NOT a good thing!
Buyer and his agent finally are able to connect with a manager and find out that the underwriter had discovered that LENDER HAD ORDERED THE INCORRECT APPRAISAL - instead of a VA appraisal, a conventional appraisal had been ordered!
Despite the obvious incompetence of buyer's lender, buyer and seller agreed to an extension of the contract and new closing date. Lender ordered the VA appraisal - appraisal #2, which came back a few days later at a value $15,000 below purchase price!
At this point, buyer, his agent, seller and I decided to have a meeting to discuss how to proceed. Buyer and seller both were still committed to the deal; however, seller was not willing to reduce the price by that much and buyer did not have the money to make up the difference. Additionally, both parties had made moving arrangements including agreed to and cancelled rental contracts respectively.
This is how this deal played out:
- On my suggestion, buyer decided to work with our in-house mortgage broker to explore other financing options as a VA loan was no longer available to him for this purchase.
- This turned out to be a good move as buyer had to start the loan process from scratch but was now working with reliable and competent mortgage broker with a proven track record who was accessbible!
- Seller agreed to a short term rental of his home to the buyers who had no other place anymore since they had to move out of their previous rental home. This also worked well for the seller who had already made other housing arrangements.
- Buyer was able to obtain 100% financing through an USDA loan that is available in Hernando County.
- The third appraisal on this property within about two months came back just $500 below the purchase price.
- Just to recap: Appraisal #1: $1000 over, Appraisal #2: $15,000 under, Appraisal #3: $500 under! All within two months time span. Go figure!
- Seller agreed to lower price by $500 but did not have to make any additional seller concessions to buyer.
- The closing finally took place almost four months after the initial contract date!
Sometimes things don't go quite as smoothly as planned and it takes longer than anticipated before the moving trucks arrive. This real estate story demonstrates that buying or selling a home is not always an easy thing.
In this case, all parties were willing to work together to bring this deal to a successful close although frustrations and emotions including anger ran high at times for buyer, seller, and yes, agents - after all we are people too!
But as Realtors we are professionals who know that our customers look to us for guidance especially when things go wrong.
I used to tease my seller that I had to increase my consumption of Lady Clairol over his home sale! This deal may have given me some more gray hairs but it didn't kill me and so it did make me stronger!
This post is an entry in the Active Rain Challenge: What Doesn't Kill You Makes You Stronger.
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