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California FHA/Probate Home Purchase Problems

Posted on: 06th Aug, 2009 12:04 pm
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Ok, so I really need some help / advice here. Apparently this is something that both my Realtor and my Lender have never come across, and we're all working to try to get this solved. I have been in escrow on a home since approx. June 1st. I originally offered $105,000. When the appraisal came in, it was only for $90,000, so we signed an addendum lowering the purchase price. We were just about to finish closing when we found out that the last appraisal - for a previous buyer, who for whatever reason didn't end up buying the house - was done less than 6 months ago. According to FHA rules, any appraisal made is good for 6 months, and so we have to use that other appraisal. The previous appraisal was made for $89,000. This means that instead of drawing up loan docs and closing the deal this week, we have to send out another probate letter to the family to notify them that the purchase price has changed again and give them a chance to say whether they want to sell at that price. This process takes 15 days, and we've already gone through this twice.
So far, this is what I've found out:
I can avoid having to send out another letter if I make up that $1,000 in the purchase price by putting another $1,000 down on the house. I don't have this kind of money. That's why I went FHA in the first place.
I also found where it states that the FHA appraisal is good for 6 months. It states "Appraisals cannot be re-used after the mortgage for which the appraisal was ordered has closed." Can I use this to say the old appraisal is no good because it wasn't made for MY mortgage?
Also, since this appraisal was made earlier, can I use the fact that the family didn't object to it with the last buyer to say that it is a valid sales price approved by the family?
And what happens to the $400 I shelled out to have the appraisal done? Do I simply lose out on that money? From what I can tell, there is supposed to be something in the FHA system that notifies a lender if there is an appraisal out on a certain house. Obviously that didn't happen here.
This is all very frustrating because like I said, I have been in escrow since June 1. Now we're looking at around Aug 27th before we can close. As much as I'd like the price to go down more, I really just want to get moved into my new house. I've been waiting almost 3 months for this already. Can I get some help here? Any suggestions would be greatly appreciated.
Thanks,
Red
Hi Red,

You have mentioned in your post that you won't be able to afford the extra $1000 and it would be good if you could get the property at a lower price. In my opinion, it would be a better idea to wait for 15 days and check out if the sellers agree to a lower price. As far as the appraisal fees is concerned, you'll have to pay it upfront and I don't think you would get a refund.

I can understand that you want to move into your new house as soon as possible but being a little bit patient would help you in saving around $1000.

Thanks
Posted on: 06th Aug, 2009 07:13 pm
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