Creative Solution to LOW APPRAISAL.

[Sean Dougherty]

Hey all,

 I am in process of selling a flip. Market is going crazy here in Hawaii, so I am getting many offers way above asking price. Unfortunately I do not think the home will appraise at those prices. All offers involve FHA loans with 5% down.

Here is my idea:

Strongest offer is $520k. I believe home will appraise for around $500k. I am thinking to counter offer with a stipulation. Something along the lines of:

"Purchase price will be adjusted according to the appraisal amount. But whatever the difference is between that amount and the aforementioned $520k, that will be paid to seller over time on a monthly basis. A separate contract will be drawn up for this transaction with terms to be determined."

Only draw backs I can think of:

1.Lender may have a problem with a 2nd loan being involved. But really this would be a private transaction with a separate contract between buyer and seller. No need to disclose to lender.

2.Realtors not being willing or educated enough to implement this strategy.

Any feed back is appreciated. Thanks!!!