Sellers Unfazed by Reality (another deal's death by appraisal)
I need some of you people on here to tell me I'm not crazy. I'm a longtime reader, we used to have an account but I lost the login/pass/email.
Been trying to buy a FSBO since the end of April. House is classic Prairie style, got some original woodwork, great lot and yard, great location, in good condition but not turn-key remodeled. In a small town where values have been steadily dropping all year.
We knew the house was overpriced from the start. Sellers were asking $275K, and made it a point to tell us that they had started at $289K, which was just downright laughable. Eventually got them down $8500 to $266,500 which we still thought was high, but we really liked the house, despite the face that it lacks a furnace (they inexplicably ripped the old one out and never replaced) and we live in a state with about 8 months of cold. House is also going to need a new roof sooner than later, plus the furnace.
Took forever to get a signed contract and the financing process went slowly. We of course had an inspection but were warned "we're firm on our price" regardless of the results. Inspection didn't reveal anything major, just a bunch of stuff that any normal person would have taken care of if they were trying to sell a house: open spliced wires with no junction box, etc. Inspector suggested we bring Roto-Rooter out to check the sewer line as it is cast iron and could likely be due for a replacement in the near future. We foot the bill for that, and the sellers make a point of reiterating that they are not budging if we find anything. It was pointless to suggest to them that checking the sewer line was for US to either continue moving forward or walk away, NOT a chance to nickel and dime them.
So we tell them we don't want anything from the inspection done except for that one junction box to be covered... you know, so someone doesn't get ELECTROCUTED before we close. Then the appraisal comes in: $23,500 less than the selling price.
We say -- we'll pay the appraised, market value for the house, and not to worry about the electrical.
They say -- we're firm -- how about we carry a 2nd mortgage for the "lost" $23,500?
We write them a long letter explaining how financially irresponsible it would be to buy a house for $23,500 over its current market worth, especially in a market that is going nowhere but down.
Can you believe these people? In this market, in this economy? I tried to explain how no bank will lend above appraised value... Their only hope is someone a) with cash in hand to purchase outright and b) doesn't want to know what the house is worth.
So now it looks like because of this one person's stubborn ignorance, we have lost over $1000 in fees, countless hours, and my family has no place to live starting next Saturday. (we had to break our lease)
Yes, I know: it is I who am foolish for thinking these people would change... They have basically showed us how uninformed they are from the beginning and have showed no graciousness or courtesy... not that those are to be expected in a business transaction... But common financial sense is.
Somebody either agree with me so I can feel better or argue with me so I can fight with you... :)
p.s. We had an appraisal contingency so we get the earnest money back; I had lobbied for including that if it didn't appraise that we get reimbursed half for the appraisal... Everyone including my wife (sorry honey, it's true) thought I was crazy and "being difficult." I could just see the writing on the wall...
p.p.s I don't know the rest of their finances, obviously, but the sellers have a mortgage payoff of $139K having bought it for around $170K five years ago... I GUESS MAKING OVER 100K ON A HOUSE IS JUST NOT GOOD ENOUGH FOR SOME PEOPLE DURING THE BIGGEST HOUSING BUST IN HISTORY.