Unfortunately, I have seen deals fall apart for flood insurance. I’ve also seen cases where the house is incorrectly placed in a flood zone, and the seller disputes that fact with the appraiser. Sometimes the appraiser changes the appraisal to take the flood zone statute off so the closing can move forward. I’ve also seen the appraiser refuse. This is the final step of the processing phase, and it is without a doubt the step where the most loans dissolve. Appraisals can be tough on both buyers and sellers. Buyers usually want the house to be as cheap as possible, so they are always looking for ways to bring the price down. Meanwhile, sellers usually have lived in the home for a long time and “feel” like it has more value than it actually does, at least according to the appraisal. When you are pushing to drop the price and the seller is pushing to raise it, things can get complicated. This doesn’t even take into account the surprises that both buyers and sellers get when the appraisal comes back. I mentioned how something like flood zones can surprise both buyers and sellers, but it happens the other way as well. One appraiser I know saw a house that had a wine cellar hidden behind a false door in the basement. Inside were about three dozen bottles of very old wine, valued at thousands of dollars each. The buyer and the seller then had to decide who got the wine and whether that should factor into the home’s price!
Like I said, the appraisal step is a wild ride.
UNDERWRITING: LOAN UNDERWRITING CONDITIONS
Addressing all underwriting conditions is a crucial part of getting a loan to the closing phase. The borrower must provide everything to the lender that the underwriting department
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