Home Buyer Tips
If you are an informed home buyer it will make you feel more comfortable, and make the process easier when you are prepared for some of the unexpected things. That is why I write these homebuyer tips about Southeastern real estate. This is an actual scenario that I heard about through a friend. Their friends were buying a Lakefront home or a home in subdivision and putting 50% down on the mortgage. They thought they were getting an excellent deal.
The White Lake lakefront home was listed at $900,000 dollars. They offered $865,000 to the sellers. The sellers were relocating out of Michigan. The sellers accepted the $865,000 because they needed to sell and move quickly.
So the buyer’s agent wrote the purchase agreement, and here lies the problem. They forgot to put in this contingency clause and left their home buyers unprotected.
“If home does not appraise for purchase price then buyers and sellers may re-negotiate the purchase price. If buyers and sellers cannot reach mutual satisfactory agreement then buyer may declare purchase contract null and void. Buyer and seller will both sign mutual release and buyers entire earnest money deposit will be refunded to them.”
This wasn’t put in that purchase agreement. So when the house only appraised for $775,000. The buyers were going to have to pay the $865,000 even though it only appraised for $775,000.
The home buyers were putting 50% so they couldn’t use the mortgage clause to get out of the deal. They still could qualify for the mortgage. They had agreed to the price.
So if you are buying real estate and are putting over 5% down you should have that clause in your purchase agreement. I hope this home buying tip will save you from over paying for any house.