Question: Our home is listed for $250,000. We received
an offer for $240,000 and they wanted us to pay $6000 of their closing costs.
The buyer has FHA financing. We countered their offer with $245,000 and no
closing costs. Anyway, after going back
and forth, our Realtor convinced us to pay the $6000 in closing costs and raise
the price to $252,000. We did and the buyers accepted our offer. A few weeks
later, the appraisal came back at a $247,000 value. Now the buyer wants the home
for the appraisal price and wants the $6000 in closing costs that we agreed
upon. Our Realtor said take it and move on. We are not happy with this. What is
your opinion?
Answer: The concept of a seller
crediting a buyer for their closing costs is pretty normal. The amount varies
from deal to deal. If the amount can be agreed upon, it is a benefit to both
parties, and produces many successful closings.
A lower
appraisal means that in order for the deal to be financed by the lender, the
seller would have to drop to the appraisal price or the buyer would have to make
up the difference. Very few buyers are going to want to purchase a home over the
appraised value. This FHA appraisal stays with your home for 4 months. So, if
you say no to the deal, the next FHA buyer within the 4 months, would use the
same appraisal.
It is possible
that you could find a conventional loan buyer, with the hope that this appraisal
would yield a higher value. But you are starting all over and there are no
guarantees that it would be easy to find a conventional buyer or that the
appraisal would be any different.
Since your
contract is being renegotiated at a lower price than what was agreed upon, you
do NOT have to pay the $6000 in closing costs. Sure you agreed to pay them, but
the buyer also agreed to pay a higher price for your home.
Perhaps you
can renegotiate the closing costs or other items in the contract that would make
the deal appealing to both sides. After all, the buyer did like your home and
you do want to sell!
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