My first contract: Appraisal may be lower

[Manasseh Arnold]

Like the topic says, this week I took action and made my first offer on a ideal house hack property while deployed. The property has two houses one lot. One is a 3b 1b and the other is a 2b 1b. We believe the listing price was determined by comping each house seperatley and slapping the prices together to get a price of $280,000, the maybe one comp was in much better condition.. I am leveraging a 0% down VA home loan.

1. I found a property at $280,000

2. The property has two houses on one lot.

3. I offer $225,000 due to limited if no comps. I also wanted seller to pay closing costs.

4. Counter-offer comes in to 245,000 and they'll pay 10,000 in closing costs.

5. I accept.

Once under contract we are going to do the loan application and hopefully request an appraisal next week. We are sure the appraisal will come in low and we'll ask the seller to come down.

My questions are:

1. It is a Rural area and there may be no comparables to the property, since it has two houses on one lot. What can I do if it doesn't appraise at all?

2. If it does appraise lower, say it does appraise at $225,000, should I ask them to come down even more than the appraised value, say $200,000? (it needs some repairs as well). What negotiation strategies would you use? Instead of just saying I'll buy at $200,000, how can I make the offer more appealing when using a lower offer?

About the seller: older woman, she also owns the bigger lot next door, she's motivated!

About me: motivated.

Thanks BP!

[Steve Morris]

"If it does appraise lower, say it does appraise at $225,000, should I ask them to come down even more than the appraised value"

1) Does your broker's PSA have a "must meet or beat appraisal" contingency in it?  Is there non-refundable involved.

2) The appraisal is more for the bank to use to determine LTV. If it comes in low, your loan amount is low, so you'll either:

a) Bring in more down

b) Keep the same down and drop the price.