Hey everyone… I’m selling my property for $1,275,000. It includes a primary home (3/1, 1,100 sqft) and an ADU (3/2, 1,200 sqft). I received an offer, but their loan appraisal came back at only $1,025,000, valuing the ADU at just $150k. The buyers really want this property and are asking if we can carry back the remaining $250k through seller financing. I know this puts us in a second lien position, which is risky if they default. Has anyone dealt with this before? Any thoughts?
If the buyer had $255k for a 20% down payment, they should be looking at a $974k loan with a 5% down loan. The gap should be closer to $50k, not $250k.
Aspen said:
If the buyer had $255k for a 20% down payment, they should be looking at a $974k loan with a 5% down loan. The gap should be closer to $50k, not $250k.
That’s a good point. I’ll definitely bring that up!
Have you talked to the buyer’s agent about a second appraisal? $150k for a bigger ADU seems way off.
Yeah, contesting the appraisal might lead to better results. It’s crazy to undervalue a newly built 1,200 sqft ADU!
Kip said:
Yeah, contesting the appraisal might lead to better results. It’s crazy to undervalue a newly built 1,200 sqft ADU!
We’re already contesting it. The bank agrees it’s a crazy number.
Just be cautious with the seller financing. If they fail to pay, you might be stuck waiting years for that money.
Also, have you looked into comparables? If there aren’t any in the city, that could complicate things further.
Finnian said:
Also, have you looked into comparables? If there aren’t any in the city, that could complicate things further.
That’s the issue. There aren’t any comparables around, which makes it even trickier.