Help! I overbid on a house without any contingencies and can’t get it appraised at the offer price
Hello, I am looking for serious guidance from anyone who has knowledge in this space or who has been through this experience. My situation, offered $75k more than appraised value of the home. Bank is only going to loan at the appraised value, resulting in me coming up with the 20% down payment + $75k for the down payment. Seller’s agent (Compass) is an asshole and won’t even share my letter to seller to explain the situation to discuss price reduction to help me out. We signed a non-contingent offer and have exhausted all our downpayment savings, vested stocks, friends/family gifts. What would you do in this situation? #mortgage #housing TC - $225k
This would be failed financing, do you not have financing contingency? but you still may lose the EM. Been there, came up with the extra- this is the reason I think buyers agent should be paid by buyers. Otherwise they would just collude with the other agent. How much is your EM? Is it smaller than 75K. if so be ready to lose that and the seller won’t want to go back to market so it may have some wiggle room. Your buyers agent need to chip in some as they f’ked up.
No Finance, Appraisal or Inspection contingency
$42k
Honest question here: what did you think would happen? You overbid because you wanted that particular house and its not worth that in the market as it appraised lower than what you bid. Either come up with the money or dont buy it and lose your earnest deposit
Did not consider this scenario
You didnt consider that a bank/lender wouldnt lend you more money for something than what its actually worth?
If you really like the house, take 50k from 401k and for remaining 25k figure something out. Else you can try and walk away but you’ll lose a lot of money in the process. Why sign a non-contingent offer in the first place?
Yes, I learned a valuable lesson, however, unfortunately, this is normal practice in Bay Area if you want to compete for a home
I also bought in Bay Area and had contingencies in place. I don’t know what you are talking about “normal practice”
Work with your bank see if they can do 18% down. Usually banks will waive off PMI for anything above 12-15% down Ask your agent to see if he can give some commission credits back to you. Shop around for other bank to see if they can help you
Yes, he is going to kick back some closing costs
Put less than 20% to cover 75k ?
I exceed DTI limits if I put < 20% down
Unfortunately, you are on the hook here. If the offer was non- contingent, you somehow have to come up with the difference. One more thing to explore would be to try to put less down. Most banks and credit unions will have the 80-10-10 heloc option where you make 10% down, or maybe even lower. See if that helps you get some more cash to cover the difference. Have you taken a loan from 401k already?
No, that is last option
Try a different bank. DM for an awesome loan officer referral. We were in the same boat and worried about appraisal but eventually it came out fine.
Currently, I see more cases that appraisals don’t come at the offer because there are very few or no recent comps, so appraisals can be a bit arbitrary. And it’s likely that a different bank and appraisal comes at the offer. Good agents can help with appraisal coming out at the offer. They can provide evidence on the upgrades, other offers, and special circumstances about comps that are abnormally low (if they are familiar with the neighborhood and have connections with other agents in the area, they may have information on details of other sales).
Put 10% down payment
Exceed DTI limits below 20%
You can pay the difference or back out and lose escrow. Those are your two choices. In the future you have learned to never buy without contingencies. Expensive mistake but mistakes happen.
Yes, I learned a valuable lesson.
In bay area never buy without contingency probably means never buy any property
What was the house price?
$1.5M
A 1.5M house on 225k income and only 20% down?…. This is madness