One of the concerns when we “won” the house for $295k, when it was listed very low at $270k, was that the home would appraise at under the purchase price. In the event that you purchase a home and it is appraised for under the purchase price, the buyer must come up with the difference. The reason is if you were to default on the loan, the lender will forecloses on the home and sell it. If the home is worth less than the loan it will sell for less than the amount of the loan and the bank loses money, that’s why you have to make up the difference in cold hard cash. Luckily for me, the house was appraised at $299k so the nightmare scenario of an under-appraisal didn’t materialize.
In Search of a Home
I called up my mortgage consultant (lender), Nick, to ensure that everything was progressing smoothly and that he needed all the information required of me. I was pretty sure he would’ve called me if there was anything he needed but it is better to be safe than sorry. He assured me that everything was on track and we are going to meet the deadline of closing next Friday (May 27th). This was also when he told me about the appraised value of my new (to me!) home.
As for the roof concerns, after faxing the request off to the seller agent, we received signed confirmation that the sellers (who have been accommodating and extremely polite the one time I met them) agreed to the request. A roofer will begin the repairs on Monday, May 23rd, and we will have a final walkthrough on Thursday, May 26th, a day before closing. While I am concerned that we didn’t spell out specifically what needed repair, the roofer must give us a certification (I will have to research what that means exactly) after the work is complete.
Finally, I have to look into the logistics of how the rent back will work and getting home owner’s insurance. The rent back agreement is that they’d cover my mortgage, taxes, and insurance so I have to double check what will come out of my pocket.