low appraisal value for home construction

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Icon Mini Profile hbryanlopez





Joined: 12 Jul 2010

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Post Posted: Mon Jul 12, 2010 12:15 am    Post subject: low appraisal value for home construction
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on february of 2010 we applied for a home loan from loan star nation bank. we got approved for a home with a contract price of 198K. We then submitted the paper works they asked for and signed all the paper work needed and got the home built. The home is finished now and passed all inspections. the bank said the (FHA loan) has requested for an appraisal and that appraisal came low. the appraisal was only 180K. Does this mean we will never get to own this home? we don't have 18K to pay for the under value. What would be my best move right now? I asked the builder to lower the price by 10K since he tagged in 10K on the actual price of 188K for closing. the agreement was 198K and the builder would pay for all closing cost. The builder however told me when I mentioned to lower the house cost by 10K, not to worry that the bank will take care of this problem. I'm just really worried that we put so much time and effort into building this house and it doesnt seem that we will be living in this house anytime soon. Any information would really help.
Icon Mini Profile shane
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Joined: 03 Dec 2007

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Location: Orange County, CA
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Post Posted: Mon Jul 12, 2010 8:05 pm    Post subject:
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In this situation you will either have to come up with the full difference of $18k, or you and the builder will have to meet somewhere in the middle. Not sure why the builder was saying "the bank will take care of this problem", because the bank isn't going to do anyone any favors - they are protecting their interest and the appraiser has determined that the home is only worth $180k. If the builder isn't going to be able to sell the home to you for $198k then I don't see how they would sell it to anyone else for $198k unless the next person also wanted to bring in the difference, or was going to be using conventional financing where they would be able to get a new appraisal.
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