Please advise: we are trying to buy a house in Virginia and the listing price was $750k. We had an escalation clause that got us to $752. The appraisal just came back for $700k and we waived the appraisal contingency. What would you do in this situation? This is our first house purchase and we went with all the advice to be the most competitive and now here we are

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Similar incident happened to us fairly recently. Our RE agent didn’t help us understand non-contingent offer and kind of rushed us to make an offer because she thought there was another offer coming the seller’s way. I was so anxious about the whole process and also learnt what we went for after the fact! Thankfully the bank appraised the place for the same price and we didn’t have to pay out of pocket extra. But it was a huge relief. I have nothing but my best wishes for you. I think what these people are saying makes sense — negotiate with the seller or take out another loan on the difference if possible? If not then may have to reach out to friends or family for the balance. Good luck.

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Glad it worked out for you! I hope things end up working out, but a serious lesson learned

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If you waived the contingency you either find another $50k or lose your earnest money. Don’t make a legal commitment if you don’t understand the implication.

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Sue the realtor. Don't ever recommend or work with them. They should have explained adequately to you on all implications especially if you are the first time buyer

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We definitely will not recommend them. It is a lot as a first time homebuyer and we got guidance from where we thought it was best to get guidance from.

Have you talked to your lender? The low appraisal could cause issues on their end (might jack up what they anticipated the LTV to be, and cause issues for closing)…

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It absolutely WILL cause issues for the lender, they’re they ones who require the appraisal. They’ll tell you to go find more money or modify your loan structure.

If you had 20% down assuming a $750k valuation, you may need to slide down to a 10% down product and use $50k to buy down the equity.

What does your agent say? Can you get another appraisal? Switch lenders? If it falls through it might look like there was something wrong with the house - how many other offers were there on the home? Hopefully your agent can help you brainstorm some ideas.

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They haven’t been in touch today at all, which is super helpful. At this point this is more of a vent, but we are super annoyed that we looked for guidance with them.

How much were you planning to put down when you made the bid? How much cash do you have available to you?

Did your realtor help you understand the likelihood of a low appraisal? Do you have recent comps from the immediate area that helped justify a $750k bid in the first place?

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You can probably back out based on the mortgage contingency

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So what was the outcome here?

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Essentially we managed to move forward and get past it. Closing day comes, agent calls frantically in the morning and tells us to back out because it was just discovered there are major permit/code issues that seller didn’t disclose. We are working so we wait to get on a call to hear more later. At that time seller has already closed and blames us for breaching contract. We back out and lose earnest money.

I assume you would not have waived contingency if you did not have the cash to close at lower appraisal. I would review the appraisal for errors but other than that would proceed to close.

Yeah you gotta either make up the difference in cash or walk away from your earnest money. That’s the point of waiving the appraisal contingency.

The house is worth what someone will pay for it. If you’ll pay 752k for it, then it’s worth 752k, not 700k

Absolutely, but it should calm OPs nerves that he’s overpaying for it

If there were two offers >= 750k, that’s the market value

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