A seller-client of mine posted on Facebook that she was about to list her house. We had two showings before it officially hit the market and sold it.
If you think all a realtor does is find a buyer, then I would be considered totally useless in this deal. Getting paid for nothing. Unfortunately, the public seems to think that the realtor’s work is done once we get to this point……heck, some realtors think their work is done at this point too!
All that was left to do on this deal is negotiate the offer, then negotiate the inspection repair list. Coordinate the closing and be done with it.
But it didn’t go that smooth. The appraisal came in very low. In fact, it came in LESS than my people paid for it almost 3 years ago.
The deal was about to fall apart.
I tried to get the appraiser to up his value since one of the comparable sales he used was 11 months old and there was a non-listed sale that was only two weeks old. He refused to budge or consider using the newer sale.
The buyer’s agent and I discussed alternatives. I knew getting a new appraisal with the buyer’s same lender would not work. Assuming the new appraisal would have come in higher, the underwriter for the loan would be forced to pick between a lower and higher appraisal. Underwriting is all about minimizing risk and covering your own rear end.
The buyer had a big down payment. I thought maybe she would be willing to pay the difference in cash. Nope.
So, here I am in a hot market with a lousy appraisal. I don’t want to lose this buyer, but the only chance we had of getting a higher appraised value would be to have a new lender. Any other option was too risky.
I sent the release to void the contract. The buyer decided to change lenders. Bingo! That was what we needed because the underwriter for the new loan would never know about the low appraisal. (And I was sort of hoping sending the release might make the buyer realize that she was about to lose the house she wanted. The release shows the other party that you have really done all you can do.)
My client was concerned about the appraisal. She wondered if we should lower the price to make it more likely to appraise. I said no, that I would rather have the appraiser shoot for the contract price. If he could justify that value, then all would be well. If it came in lower than the contract amount, we could renegotiate with the buyer at that time.
There was another listing up the street that was 100 square feet bigger. I called that listing agent to see how it was going. She told me that her seller had turned down two offers close to the list price (which was similar to my listing) because the seller wanted to move out after the end of the school year.
Armed with that information, I told the new appraiser about the other listing getting offers well above the first appraisal we had. I told him that the market value of the neighborhood has outpaced the recent sales. Keep in mind, that market value is right NOW. Recent sales just tell you what the market was doing in the recent past. That helped him out, and also told him nicely that I wasn’t going to be easy to deal with if the value came in light.
The value came in just fine. Crisis diverted.
Not every deal has a big problem like this to navigate. This deal would have fallen apart if it wasn’t for the right combination of experience, wisdom and luck.
So yeah, even in a hot market, it is good to have a realtor.