First Time Homebuyers--HELP!

[BuckeyeFinance]

My gf and I are looking for some advice on how to handle this situation. We love the house but we don't want to overpay.

The house we are in contract for listed at 450k a couple months ago and has since reduced to 425k list price. After we walked through the home, we knew we wanted to make an offer. The selling agent let us know that they had another offer on the property but it was a lowball offer and they didn't know if anything would come of it. I have no way to know if that is a complete lie or not. We offered 410k and ended up settling on 415k. It is very difficult to run comps because the houses in the area are anywhere from 100k to 1m with varying lot sizes from .2 acres to 10 acres. Most of the houses are custom built and have been updated at different rates over the years. I suspect we may be overpaying for the home but I am unsure. Our lending bank appraised the home at exactly 415k. Is this legitimate? The bank knows we are putting 20% down so why would they want to appraise below sell price and potentially have the deal fall through if the portion they are lending is easily covered? Would it make any sense to pay for a private appraisal?

We've completed the inspection and have about 10k worth of repairs we'd like the seller to make or credit us for. We think it may be more difficult to get the repairs now that the bank has appraised the house at 415k. Is that accurate? Any advice on handling the situation?

[ShoulderThingThatGoesUp]

My advice is not to buy a house with somebody you're not married to, and that in most places $400k is way too much space for two people.

[BuckeyeFinance]

While I appreciate your reply, that's not the purpose of the discussion. Either of us can afford the mortgage without the other's income. Also, we are renting out rooms and have 2 tenants (friends of our's) signed to long term leases. Additionally, we have a very specific agreement between the two of us that governs what happens in each undesirable scenario that our attorney put together.

[Lews Therin]

The house is worth 415k to you, and you've now realized it's only worth 405 (because of the repairs) If that is how much it is worth, offer than much (or require them to fix it). Unless it's the perfect house, others will come on the market in the future.

[Finallyunderstand]

Appraisers don't look for repairs so you still have the right to ask for repairs regardless of the appraised value.  Additionally, the seller should never have access to your appraisal and you're not required to tell them, their agent, or anyone else what the value came in at. 

Appraisals are simply an opinion of value, not a fact.  A different appraiser could give you a different value but what would you do with that information?  Your lender can't/won't use an appraisal they didn't order so you simply would be throwing a few hundred dollars out the window and not accomplishing anything. 

Be happy with the home and don't worry about it.  A home is a place to live first and foremost.  And if you're lucky enough to live in the right locations it can be a great builder of wealth but that shouldn't be the primary purpose for your primary residence. 

[canyonrider]

A few things going on here. My thoughts, in rough order:

Purchase Price - Sounds like you are having some buyer's remorse, second guessing whether the property you already agreed to buy for $415K is actually worth $415K. Regardless of comps, a property is worth what someone will pay. It's probably getting a little late in the game to be worried about that (although see below), you're not overpaying if you decided its worth $415K.

Appraisal - As the buyer seeking a loan, you generally want the appraisal to at least match the purchase price so that you don't have to make up the difference in cash (although there are other ways this can be handled, use the Google). I don't see why you are worrying about the appraisal.

Repairs - I would just seek the $10K from Seller as cash at closing as a portion of closing costs, but there are also different ways to approach this as well. Be ready to negotiate the $10K amount as well.

Finally, depending on where you are in the contract timeline, if the whole deal doesn't feel right you may still have the option to terminate the contract. But from your post I get the sense that you are worrying a lot because of some relatively minor issues with a house you otherwise "love." Do you have a realtor? If so, talk to your realtor about this. If not, might be worth a few $$ to hire a real estate attorney to help you decide how to proceed with any of these issues.

[rubybeth]

Are you willing and able to pay for the $10k in repairs? If not, walk away. Or, at the very least, ask seller to cover the costs, and if they won't, back out. A good realtor should be able to coach you about what's best.

[maricela]

Appraisals frequently come in at the agreed selling price. The biggest factor in the value of a house is what someone is willing to pay for it. The appraisal tells the bank based on comps, is your offer in line what others would have offered or is there something else, like collusion, going on.

Did you get an inspection and is that the source of your desired repairs? That’s really the only way you’re going to get a seller to pay for repairs. And if they are rather major but not an impediment to your loan, I’d ask for a price reduction to cover or cash at closing and do it yourself so you know it’s not done on the cheap.

[frugaliknowit]

A few things going on here. My thoughts, in rough order:

Purchase Price - Sounds like you are having some buyer's remorse, second guessing whether the property you already agreed to buy for $415K is actually worth $415K. Regardless of comps, a property is worth what someone will pay. It's probably getting a little late in the game to be worried about that (although see below), you're not overpaying if you decided its worth $415K.

Appraisal - As the buyer seeking a loan, you generally want the appraisal to at least match the purchase price so that you don't have to make up the difference in cash (although there are other ways this can be handled, use the Google). I don't see why you are worrying about the appraisal.

Repairs - I would just seek the $10K from Seller as cash at closing as a portion of closing costs, but there are also different ways to approach this as well. Be ready to negotiate the $10K amount as well.

Finally, depending on where you are in the contract timeline, if the whole deal doesn't feel right you may still have the option to terminate the contract. But from your post I get the sense that you are worrying a lot because of some relatively minor issues with a house you otherwise "love." Do you have a realtor? If so, talk to your realtor about this. If not, might be worth a few $$ to hire a real estate attorney to help you decide how to proceed with any of these issues.

+1

Also:  10K in repairs "sounds" like a lot.  You better have specific documentation to justify it.

My advice is not to buy a house with somebody you're not married to, and that in most places $400k is way too much space for two people.

+1 (only up to the comma, assuming you're in a HCOL area)

Too much has to "go right" for this to work out well long term.  Too much can go wrong, both financially and emotionally.

My advise is kill the deal through the inspection, eat all the fees you have paid as "learning tax" and don't buy a house with someone you're not married to (nothing to do with religion/moral, blah blah), you are setting yourself up for a mess in the future.

[BuckeyeFinance]

All of the exact same things have to go right even if you ARE married. Marriage doesn’t provide security. Our cohabitation contract does.

Thanks to everyone for the appraisal info. We aren’t going to do a private appraisal. We’ve requested credits for repairs and cited the inspection.

[Sibley]

What do you mean by "repairs"? That can range from someone put a fist through the wall, to the roof needs extensive work and everything in between.