Wednesday, May 20, 2009

A Black Day

There is no other way to describe the events of yesterday. I hasten to add that my mood is somewhat better now, but real depression was at the door yesterday.

The new appraisal came in. It is $20,000 lower than the offer we had accepted from the buyer. The appraisal was mandated by the buyer's bank, through the buyer--we have no idea how the buyer herself felt about having to get (pay for) a new appraisal, but we do have every reason to believe she's not weeping at the prospect of paying $20,000 less for the house.

Our agent is working a few angles, trying to call the appraiser to see why he used certain houses and not others as comps, calling the bank to see if they'd accept an amended appraisal if the appraiser would agree to do one, (this is a very long shot because if anybody were going to dispute the appraisal, it would have to be the one who ordered it--the buyer--not us) and talking to the buyer's agent to plead our case, hoping she'll meet us in the middle and agree to pay half the difference--$10,000-- in cash to save the deal. This woman who is our buyer spent 2 1/2 years looking at houses before she broke down and made an offer on this one. She is clearly in no hurry. But we have met her and her partner; a tenuous personal connection has been made beyond the only-through-agents protocol. We gave them some priceless historical pictures to reinforce their sense of stewardship of the house. How much does she want the house? How much has she bought into this idea psychologically? She is our best hope.

I immediately called Gary, our builder, and told him the bad news. The guy is amazingly accommodating; he has told us not to worry, that he is sure some more dollars can still be squeezed out of the plan and still maintain the house that we want. Receiving that word this morning is what changed my mood from blackest black yesterday to somewhat hopeful today.

Steve's first response to this setback was the same as it was before: to call everything off in an insulted huff and "wait for the market to improve." He has this notion that we are "giving away" this two-bedroom house, which even at this lower price is still fetching more than a half-million dollars, because it is not sufficiently more. For the second time I had to remind him that we could die waiting for the almighty dollar to decide to dance to our tune alone. He agreed, but he didn't like it. Trying to stay positive when half the partnership is kicking and screaming as he backs away from the brink is not easy.

More to come, of course.

18 comments:

Mim said...

Ralph
Oh my thats all I can summon to say in your support..oh my goodness!
Sticking with you in your journey.
What a ride you are having.
But thanks for sharing in the way you do.
I am thinking you didn't sleep too many hours last night

Ralph said...

Thanks, Mim. In fact I took half an Ambien because I knew I'd be even worse today if I didn't sleep. It worked. Always a hangover the next day, but I feel better than if I hadn't slept at all.

I hope there will be some more positive news today.

Zoey and Me said...

Yesterday a group of Realtors here challenged appraisers by asking them how they can do simple math, ay ear ago, when the volume here is 7800 units for sale (mostly forclosures, short sales) and tell us the adjustment is 27% less of 2005 appraised values; when now that the inventory volume is less than 4800, using the same math, those new listings to the market aren't worth 16% less? Huge difference. Well their answers were all gobble de gook, to say the least. Frankly, they don't know.

I would tell Steve it's a crap shoot out there and move on with your lives. We are waiting on our appraisal to come in from the out of town Dude. And I think you said your appraiser was local? Jeebus. If yours is less than 5% of list; mine should come in less 15%.

Let us know.

Zoey and Me said...

Get this: My last comment had the word verification "aprising" is that a misspelling, ya thunk?

Ralph said...

HA! Z&M, the blogger genie knows.....

You're having an appraisal done on your house? Are you planning on selling?

Interesting about the appraiser challenge. I'm not surprised there was no logical explanantion. it's definitely an art, not a science, especially for a hard-to-compy house like this one.

Not to worry, my faithful blog friends will be the first to know any news. Thanks for being there.

Zoey and Me said...

Yessir, we're always here. Actually I sold an historic home in old Rockledge and talked here about the bank assigning an out of town appraiser based on this new regulation by NY's Cuomo, called the "Coma Law" down here. You said your appraiser was local, mine is coming from miles away, half the distance to Disney. But coincidentally both were ordered within 24 hours of each other. Yours came in first yesterday, mine is due tomorrow. Another law from the Congress coming up is that no one can talk to the appraiser. If a licensed Realtor offers their opinion, as of 2010 if O man signs it up, the Realtor can be fined up to $20,000.

Ralph. Are we having fun yet?

nan said...

Truly sorry, Ralph.

Ralph said...

Fun? Not quite! We did feel fortunate about getting the appraisal done under the July 15 wire when that new "no talking" law takes effect. Fat lot of good it did us, as ut turns out.

Cuidado said...

I would be insulted and clearly pissed off if the price was 20 K below what the buyer agreed to be paid. Rubbish! Fire him!

Ralph said...

Cuidado, the banks doing the lending insist on these final appraisals to make sure they're not lending "too much" money for the purchase of a house. They hire the appraisers for this purpose. Each appraiser is independent and does his/her work according to the statistics he/she finds. Different appraisers can and do come up with different values depending on the stats they choose. Values can also go up or down almost on a monthly basis depending on the local market. This is not to say we like the lower value this particular appraiser came up with, but to explain that home appraisal is really more of an art than a science, and the seller (me) can do nothing about it. The bank won't lend the buyer more than the house is "worth." And if the value comes in lower. so much the better for the buyer. It means a smaller mortgage.

Zoey and Me said...

Banks rely on appraisers to limit their risk. With tongue in cheek I may add "now more than ever". They certainly learned what risk meant when they pumped up the values so high even a kid with a $15,000 income could live in a $300,000 pool home . . . at least for a year, anyway. To help answer Cuidado's "fire him" . . . in my case it's a lady, secondly they ain't working for us so a pink slip won't work here. I see where the more money a person puts down the higher the appraisal. That's going to come into question too as one will never know how high is high until cash buyers who buy high become part of the "cost effect". We certainly learned where low was thanks to all our friends on Wall Street.

Ralph said...

We've just achieved closure on this and we're going to be OK. The appraiser actually called our agent (Ron) back, and looked at the alternative sales Ron thought should have been taken into account, and disagreed with Ron. He refused to change the value.

Meanwhile, the buyer's agent told the buyer about the lower price. Instead of jubilating, she was ***sorry*** for us and is giving us all the cash she has to make up the difference. It's not much--only $4000--but now we're taking only $16K less than $20K, and it warms my heart to know that if she had the entire difference she'd have made it up. Why the generosity? Because she and her partner met us the day the engineer was here. They liked us and we made them feel like honored stewards of their new home.

Like I said in the post this morning, Gary, the builder, is going to squeeze more savings out of the house. We may well end up with the extra $20K we thought we'd have after all, to build the pier and buy furniture. Systems are "go" once again!

Zoey and Me said...

"It's a Miracle" !!

Ralph said...

You're right, Z&M. We've been blessed with what I can only call grace a couple of times through this whole real estate adventure. Totally unexpected--and undeserved--special favors. From the guy in Delaware who talked himself into paying $300K for the land there--almost exactly what we paid for it--to this gesture on this buyer's part.

Jeff said...

Just started reading your latest adventure. Most recent news is the final arbiter - the house is worth what someone is willing to pay.

Waiting for the market to rise means that all boats will rise along with it. And there is no way to estimate when the market will turn. I don't even know if the old rule that real estate runs in 15 year cycle works anymore.

Hope you all can reach a compromise and move on. This has already taken quite a bit out of you...

- J.

Ravel said...

Unbelivable! It is already not easy to let go of a house you lived in for so long... and you had many obstacles on the way.
So sorry.
Thinking of you, Ralphie.

Ralph said...

Jeff, I've made that point to him about all boats rising. Not sure it sinks in or not, or makes any difference if it does. It's the "principle" with him. He thinks he's owed a certain amount he got stuck on during the real estate bubble 4 years ago. The argument that seems to work because it's unassailable is that we're not getting any younger and either of us could drop tomorrow. He grudgingly goes along with it.

Ralph said...

Thanks, sweet Ravel. Read the comments--there are a lot of them--there's a happy ending to the story.