Question about appraisal

We put a bid on a house, negotiated, then our offer was accepted, we signed the binder and now they are working up contracts. So, we have an engineer going tomorrow, etc. The mortgage banker called us and said that the seller wants us to get an appraisal ($350) to see that the price they agreed on is right. Is that a normal process? Why should we pay for the appraisal that they want? Any info would be appreciated, thanks!

Re: Question about appraisal

I was under the assumption that getting the appraisal was part of the home buying process

Usually the bank requires it
ETA...usually the bank that you are using for your mortgage recommends the appraiser, not the seller

Message edited 1/23/2006 1:55:33 PM.

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That is odd to me- I would have thought that when they listed the house, that the RE agent who they were working with would have given them those numbers.

IMO, if it was that important to them, they should have shelled out for the appraisal BEFORE taking your offer. I don't think you should be on the hook for it, especially not for $350.

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That is odd. They should have taken care of that before hand. They are probably thinking that if the appraisal comes in higher than they can ask you for more money which is foolish for a seller to do currently in this market for the majority of houses.

My bank did the appraisal AFTER we were in contract. BTW, the bank appraised my house for over 200K more than I bought it for. I don't think the seller ever knew but even if she did we were in contract for a lesser price.

You shouldn't pay for one for the seller. Whoever buys that house will pay for one, indirectly, because the bank will require it.

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I assumed she is already in contract since she is having an engineer come...
SO i highly doubt that the seller is doing this so they can raise the price on her per say...especially if a contract was already signed witht he specific amount already agreed upon.

Message edited 1/23/2006 2:29:07 PM.

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Message edited 1/23/2006 2:34:53 PM.

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Thanks everyone. I called the banker lady back and DH misunderstood her. She said it is mandatory for us, and a lot of times when the contracts are written, then the appraisal comes back, say really low, then problems arise. I don't think that will happen, but it would be good to know. She said if it comes back higher, then the seller doesn't even get a copy of our appraisal.

Now, I have another question. Our offer was accepted and the contracts are being written. Is the house ours? Also, once you write on the binder what your downpayment is going to be, are you bound to that, even if you are approved for a large loan? I ask because we may want to take off just $5,000 of that to do some minor updates in the house. Can you tell we are almost broke after this

Also, any specific questions I should ask my attorney? Thanks so much for your help!

ETA: We negotiated yesterday, they accepted an offer, then we signed a binder and they are now writing up the contracts as we speak. They are eager to close. We have the engineer going in tomorrow and I'm guessing the appraisal will be done within the next few days.

Message edited 1/23/2006 2:36:19 PM.

Re: Question about appraisal

No the house isn't yours until closing..

I have heard that the seller can continue to show the house and could accept another higher bid

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Thanks. Even once the contracts are signed? I hope they don't!

There actually was a higher bid, just $5,000 more, but they accepted ours because we are ready to close asap. Or are they full of it? It's so hard to tell!

Message edited 1/23/2006 2:49:04 PM.

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i could be wrong...

i just sold me condo and the girl who bought it from me said that she went to contract on another condo but they backed out for a higher offer...

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Thanks Redhead. I hate that it is so not final. I'll just keep my fingers crossed.

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Thanks, same to you!

Now I have another question. I was given the name of an attorney through my broker. She said he only charges 775, she has known him through friends for several years, etc., and he is quick and can get us to close within a month.

I was informed by a few different people not to use the broker referred attorney. So we called another attorney - he said that there is no way to close within a month and that it takes 30 to 40 days to get your mortgage and it takes another 2 to 3 months to go to contract. SO...do you think we should use the real estate attorney she recommended to make sure we dont' lose the house? It has all updated electric, new boiler, roof, siding, etc...so we don't forsee any major problems. Thanks for the advice!

Re: Question about appraisal

From contract to closing ours took 30 days. Our attorney is in NJ otherwise I would recommend him. He charged us 800 so 775 sounds reasonable to me. ANd yes, you can close within a month, that is what a time of the escence clause is for. Oue home had 5 title issues (that is a lot) and they were all cleared/fixed at our closing.

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Thanks!

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Message edited 1/23/2006 8:59:42 PM.