Friday, July 26, 2013

We Are Not Alone

The appraisal came back -- waaaaay under the agreed upon selling price. Holy crap. Our choices are:
1) walk away from the property
2) pay the entire difference ($50K that we don't have)
3) split the difference with the seller
4) offer to pay the appraised price

On the face of it, number 4 seems like the most logical choice but it isn't. The property is worth the agreed upon price. We have asked the seller to split the difference with us. If all else fails, we will modify our loan. We want the property and if we walk the chances are good the same thing will happen again on the next property we find.

65% of escrows in California fail for this very reason.

In 2008 after the housing collapse, the rules were changed. Instead of lenders being able to use local appraisers with proven track records, the government mandated an arms length relationship (which makes sense). Implementation created a third party appraisal company. 25,000 qualified and experienced California appraisers were put out of work. The third party company staffed up with inexperienced (and cheap) appraisers.

Now, a lender sends a request for an appraisal to the company. They have a rotating list of appraisals and offer the job to the next name on the list, regardless of geography. This explains why the first appraisal was done by someone 50 miles away. The price of appraisals also went up (someone has to pay for that middleman). In rural areas, the price went up by more than 25%.

So, here we sit with lots of other folks at the mercy of inexperienced appraisers who don't understand rural properties. We are frustrated beyond belief; living in a hotel, the dogs in a kennel (yes, TexWisGirl, it is killing us), not able to ride, and not able to move forward with our lives.

And, not alone.


- Posted using BlogPress from my iPad

12 comments:

  1. I have a real estate friend in California that I spoke to about your situation. She may have some ideas about financing and what she has done to get people through the process.

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  2. oh, this just brought tears to my eyes. i am SO very sorry! i know how much your animals mean to you. i know how much 'home' means to almost anyone. i hope the seller will split it with you, but maybe they can't afford that option either.

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  3. What an awful situation Annette. Knowing that you're not alone doesn't really help, does it.
    Maybe Lori's friend will be able to help, maybe your negotiations with the seller will bear fruit. Keep positive, I think you are meant to have this house.

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  4. Oh this makes me so sick thinking of what you are going through.I cannot believe this.I do hope someone can help you.Living in Canada I have no idea.Oh Annette I will be thinking good thoughts for you. HUG B

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  5. Well, this stinks. Hope there is a solution to this dilemma and it all works out for you quickly. There just has to be a way to resolve this.

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  6. What?! I had no idea, this is terrible. I am so sorry about your dogs, I know they must miss you and you them so much. Are the horses and donkeys at the new house? I have to tell my husband about this, since we moved here we have been so out of the real estate market. But we still have property we will want to sell some day. And how unfair for all those appraisers out of work.

    Anyhow, I wish you all the best and I hope this works out. The seller must want to sell after all, and being so close, I hope they will agree.

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  7. Oh Annette... I don't know what to say. If it's any consolation, your posts sound as if you're keeping on an even keel, despite the maddening circumstances. I hope the sellers do the decent thing. So glad you and Brett have each other. Chin up! :D

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  8. Holy cow! I knew moving would be hard on you, but I didn't expect it to get this out of hand. This is just ridiculous.

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  9. I hope you can work through this soon, it's a terrible situation to be in. Good luck.

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  10. I'm so sorry. You are so right in your assessment of the appraisal laws - the same process cost us over $75,000 when we sold our home in SC. It was appraised by someone who didn't live in the area, had no idea of the value of an acre on the golf course. I will say a prayer for you that it all works out. I'm sure you were meant to live there, and somehow it will come together! Good luck to you all.....

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  11. I hope you have some good news soon.

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  12. I went back and saw this after I read the Sunday post... I am so sorry... I don't understand all the rules in California, but I understand not being in my own home.

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Thanks so much for commenting! I love the conversation.