About a year ago I had a really nice couple that was visiting Myrtle Beach from New York looking to purchase a second home. We looked at several properties and finally chose a new construction property that had an on-site agent representing the builder.
Things for this deal was moving along very smooth. We had the mortgage taken care of, had all the inspections done and all the necessary repairs completed. It was day of closing. The buyers had come in town from New York, had the amount needed to close wired already to the attorneys office.
However when we arrived at the closing table with the attorney, the amount of the loan was incorrect. The buyers had gone down to this builders design center and made several upgrades to their properties totaling over $7,000. So therefore the purchase price had gone up. But, the change form for these upgrades had never been sent to the attorney or lender by the builder like they were supposed to.
The attorney called the lender and they said they were going to send back out the appraiser to re-appraise the property and would be back shortly. So, we sat calmly at the attorney's office waiting for the updated information. Here is where the big problem came in. The seller had sold several other units with many upgrades in all at a flat rate price. It didn't matter if there was $2,000 or $20,000 in upgrades, the prices were exactly the same. So, when an appraiser tried to find a higher price since my buyer went and added more upgrades which were not available in the flat rate price, they could not appraise the property high enough.
So, the seller stated that the buyer needed an additional few thousand dollars because the property was not appraising for the loan amount. My buyers immediately panicked and were ready to walk away from the deal. I assured them not to panic just yet. I shared with the attorney that the upgrades were added to the property and that there were two options left for the sellers to do. Either remove the upgrades (which would have included removing ceramic tile flooring, all the berber carpet in the home and more) or sell the unit for the amount it appraised for because my buyers were not going to pay more for upgrades than they were actually worth.
The attorney called the builder and they agreed to leave the upgrades in the property and sell for the lower price to the buyers. My buyers thanked me over and over and were so glad to have me as their buyer's representative. Without my assistance, they would have either lost a wonderful property, or paid several more thousands of dollars out of their pocket to purchase.
The moral of this story is that sometimes the upgrades you add to a property cost more than they bring value to a home. As a rule of thumb, you do not want to be the "King of The Hill" in a neighborhood. It can cost you greatly when you go to sell.
Jeremy Blanton- Myrtle Beach Real Estate Expert
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