On the edge of my seat

These last few days have been tense.  My FD project was slated to close on Friday. The first appraisal came in with adequate value to support the purchase price.  However, the buyers' bank wanted to have a second appraisal done.  The second appraisal was $14,000 less.  Talk about having the rug pulled out from under you.

Why the second appraisal? Apparently the underwriter was not happy with the newer comps.  They wanted to see homes that were older. Now here is the problem.  This house has new HVAC, plumbing, electrical/lighting, appliances and upgraded stuff all around.  The house is brand new on the inside.  So just where is a comp on a 1982 - 1993 going to be more comparable than using newer comps?  It isn't.

The buyers did offer $5k more than the appraisal.  Not good enough for all the reasons mentioned. It is a brand new house with stuff in it that isn't in homes costing $50k more.

I reduced the purchase price by $2,500.  I'm willing to take my chances on another buyer if this does not pan out.  As it turns out, they have verbally accepted my counter to their offer.  If all goes well, we will close tomorrow. 

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This situation reminded me of what my daughter went through on trying to buy an old property (1890) that had updates and was sitting on almost 5 acres of land.  Loan underwriting got stingy; and I was forced to have to read FHA underwriting guidelines.  I determined that the house was unique and that underwriting had the opportunity to exercise judgment.  The loan was moved to another lender, who had no problems with anything.  The unfortunate thing was that the seller did not ratify the new contract (at the same price).  Rather than wait the 48 hours, they accepted a cash offer for more than $15k less.  48 hours --- $7500 per day reduction.  Had the seller waited (and it was Fannie Mae), the American government would have realized $15K more.  Oh well.

My daughter (and her intended) were devastated.  Weeping.  Wailing.  Total despair.  Seeing the home that you want to live in is like seeing the man/woman of your dreams.  You have that conceptual image imprinted on your brain so vividly that when you feel the emotion of having a "know-it-when-I-see-it" moment  coursing through your body it feels karmic.  To be upended out of that connection is like mourning a death.  The death of a dream is very potent. 

The buyers were as dismayed (probably more so) than I was.  These were folks who had that instant karmic connection with the house within 30 seconds of opening the door.  They would ride by to check on the progress of the requested repairs.  They did their final walk through last Thursday anticipating the Friday close and moving in over the weekend. 

And the bank yanked the rug from under them.  I've not met them, but I instantly knew from having watched my daughter and her intended go through the buyers' range of emotion. 

So I wait for the amendment.  I know that this house will give them many years of trouble free enjoyment.  We exercised the same amount of thought and care on this home (indeed all of the ones that have come under our hand) as we would on our own home.  (I lie---our thought and care is more as I look at repairs I need on my own home!).