Is the offer on my home too high?
by Jacques Ambron
Mar 02, 2016 | 6950 views | 0 0 comments | 48 48 recommendations | email to a friend | print
Jacques Ambron has been a real estate broker for over 30 years. He owns and manages Madeleine Realty in Forest Hills (madeleinerealty.com).
Jacques Ambron has been a real estate broker for over 30 years. He owns and manages Madeleine Realty in Forest Hills (madeleinerealty.com).
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Q. I just accepted an offer for my home higher than I ever expected. I’m in a great position, correct?

A. Not exactly. Even though you might accept an offer that is very high in price, you may still encounter an obstacle. Namely, if the buyer is planning to obtain a mortgage, then the appraisal may not be high enough.

Banks generally will lend on the basis of what is known as LTV or loan-to-value. If they value your home for less than the purchase price, then the mortgage might not be enough for the buyer’s purchase. At that time, you might have to renegotiate the price, and/or the buyer will have to come up with additional cash to cover the gap.

Always make sure that the broker checks the buyer’s assets to verify that they have sufficient funds in the event of a lower appraisal. Another solution is to go to contract “not subject to appraisal.” This way it is solely the buyer’s responsibility to come up with the difference in funds needed to close.

Always talk to your lawyer and real estate broker first.

Please send your real estate-related questions directly to jacques@madeleinerealty.com.

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