Plymouth MI home selling tips – appraisal issues
When selling your Plymouth MI home you might have an appraisal issue. Sometimes, Plymouth MI homes do not appraise for the sales price. So what happens then?
Let me give you a scenario of a home that we just had issues with. The contract sales price was $200,000. The buyer was putting 20% ($40,000 down and a $160,000 mortgage). The house only appraised at $160,000 and my seller wanted to know why the buyer couldn’t just come to the table with the extra money. He assumed nothing really had changed. He thought the buyer just needed the same $40,000.
But that was not true. Assuming the buyer is not changing the loan terms this is what would happen. The issue is the bank will only mortgage 80% of the $160,000. So the buyer would only get a loan of $128,000. The buyer would then need $72,000 not the original $40,000. So the buyer would have to come up with a lot of money. Money he may not have.
So that is why most sellers have to come down in price to make the sale go thru. The buyers just do not have the money is one of the reasons. But the second reason is that why would the buyer over pay for a house. The bank had an appraisal done by a licensed appraiser. The bank says it is worth $160,000 so would you pay $200,000 for it?
I hope this gives you, insight into the selling process and what may happen when the house does not appraise. At least you have the reason the buyer is asking you to lower the price of your Plymouth home.
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