We received the offer on House #6 on 3/12/09. The buyer was not very qualified, but I was slightly in-experienced and based on their lender approval latter, we negotiated and accepted the offer. Everyone seemed very motivated along the way, so I thought we could make it work.
Around 5/20 when they still had not closed escrow, I agreed to give them an extension until 6/30 if they put another $2,500 into escrow (from the original $5,000) and made it all non-refundable. The agent agreed to this and relutantly, we continued on with this transaction knowing that if the agent and lender did not perform I would have to take $7,500 from this couple. As 6/30 approached the agent still was not ready to close, we negotiated back and forth and she had approval, but they needed to do a review appraisal. The agent figured they could get everything close by 7/10. So trying to be nice, but take care of myself, I told them I would extend until 7/10 if they added another $2,500 (non-refundable, of course) to escrow and paid a per-diem fine of $100 per day. They happily agreed.
The Review Appraisal
I saw this coming, but the review appraisal came in at $180,000 when the original appraisal came in $200,000. This was terrible, as I was not really willing to negotiate down at the 11th hour when I had so much non-refundable money. But the agent didn’t even ask to negotiate, she found a way to get her original appraiser to “challenge” the review appraisal. A short letter was written that the review appraiser used bad comps, in bad areas and it was not a good number. Somehow the bank worked with the letter and agreed to do the loan based on a $200,000 appraisal. I was pleasantly surprised to see this happen to say the least.
We are all set to record with the county today (7/14) and they negotiated the per diem fee down to $500. So I think everyone is pretty happy on this transaction, obviously, it took way too long. But live and learn, low credit score buyers are not very good, even if they have decent money (they ended up putting about 10,000 cash to fund the loan).
It is good to have another one checked off of the list!