Offer above appraisal

[Chris Igard]

I bought a HUD home at 83K and the appraisal just came back at 80K. We would have to come to closing now with an additional 3k. This is an owner occupant. Any advice would be greatly appreciated. The house needs some repairs in the area of 6-8 thousand. The plan was to live in it for a year and then rent it out. Thanks

[Greg H.]

HUD will not reduce the sales price. Since you are an owner occupant your option are :

-Pay the extra 3k down payment 

- terminate and you will receive your earnest money back

[Chris Igard]

Hey @Greg H.what do you think the chances are of just terminating the sale and reapplying for it?

[Vivek Khoche]

@Chris Igard- HUD houses are deeply discounted, $3K should be OK if you check the ARV of similar houses. In the cash flow markets, this is very common as investors pay premium for services and usually it's 20 - 25% over market price. I was offered @$75.9K where they were not confident of getting appraisal anything over $56K.

Alternately if you can walk away if price and repairs are on higher side.

Good Luck

Vivek

[Account Closed]

@Chris Igard Have you or your agent taken a fine eye to the appraisal? If you have better supporting comps the appraiser will take a look at them or if the adjustments are out of proportion you might could get a little there. It the data supports a change most appraiser are willing to look at it and make changes however it has to be supported maybe it will get you the 3k or half way or you will be back where you are. But whatever you do it needs to be quick.

[Cherie Ganesh]

I would look at appraisal and see how he treated the repairs that are needed. There are some lenders who will do a short term loan for the estimated amounts of repairs if those will pull the value up to where you need it to be and then merge the original loan and the "construction" loan together into one loan. If it's insurable by FHA I believe they have a program that might work for you since they're used to buyers of foreclosures having to do repairs and you are planning on living in it for at least a year.

[Greg H.]

Originally posted by @Chris Igard:

Hey @Greg H.what do you think the chances are of just terminating the sale and reapplying for it?

 That is an option. Keep in mind there is no guarantee that you are the high bidder again. If it was still in the owner occupant period, you should get another opportunity without investor being able to bid

[Johnnie Fair]

Has anyone ever challenged an appraisal? I’m in a similar situation, my appraisal report says all appliances are in working order. We don’t have an oven or fridge!