This is a lesson for buyers and lenders to deal with and adapt to rising interest rates and falling values.
First home buyer Jacqueline Schaffer moved to Cloverdale in May. I bought an apartment in Deadline early August. But by the time her bank completed an assessment ten weeks after her, her property was worth less than she had agreed to pay, and she had to find the difference needed to complete the transaction. I had only one week.
This is a cautionary tale for buyers and lenders to grapple with andadjust to rising interest rates and falling values
Schaffer We agree that it is unusual for a lender to take this long to order an appraisal after an offer has been accepted by other realtors and brokers who were not involved in the purchase of the property. We should have asked for an appraisal at the time of purchase, especially in an environment where it was clear that prices were starting to fall and interest rates were rising," said Steve Saletzky, a Vancouver real estate agent.
But some say banks and other lenders are wary of acting too quickly in a market downturn.
"It's just not normal for the bank to take her 10 weeks," said Mayur Arora, a real estate agent in Surrey. "However, we have noticed delays and slow response times for banks to conduct evaluations and give approvals."
so we don't want the value to drop by double digit percentage points.
Shaffer, 25, bought the apartment on May 9 for just over $326,000 of her $65,000, or she put 20 percent down, on August 4. aimed at her three-month settlement of accounts.
Her representatives for Coquitlam's Prospera Credit Union did not order a full assessment until July 19, she said. After that, he took a leave of absence from her July 12th to his 19th.
On July 28, he informed Schaffer that a full appraisal had returned her $310,000 worth. She agreed to pay her seller in her May and until the closing date she had to calculate the difference within a week.
In order to close the deal this week, she hastily accepted her $13,000 line of credit offered by the credit union at an interest rate of 4.75%. than her ex's 3.78%. Initially, she was given a much higher rate of her 6.7% on that amount.
The credit union also allowed her to keep her $2,000 promotional cash her bonus even though her mortgage was technically below the qualifying amount. and a Canadian her tires, Starbucks, Home Her Depot, and a gas card worth a total of $175.
Prospera Communications Her manager, Michelle Gagne, said the circumstances of the incident were unusual, without divulging specific details.
She said Schaffer made the offer without any subject, including funding.
"The process has taken longer than usual, but the market downturn in recent months has caused the price she offered (well above the asking price) and Valuation (65)
Schaffer said he had pre-approved for a $375,000 mortgage and offered $326,000 for an apartment that was asking for $280,000. Everything on the market was above asking price," said Schaffer.
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Schaffer's mother agrees that no one can control the market, but what accountability lenders hold to homebuyers in this kind of market?
In early July, MLS benchmark prices for all Greater Vancouver properties were still higher than in 2021, but many median prices a snapshot Offer more and the market has been declining since the spring as interest rates rise and the market reacts with lower sales.
"They said they were under no obligation to order when, but they were aware of the (market) drop and said they didn't place an order until ten and a half weeks after her offer was accepted. I'm getting emails," said Vanessa Shaffer.
She is proud that her daughter was able to shop in this expensive area. She worked herself and she saved $65,000 to live in the house "without borrowing a dime from anyone" and pay a small rent.
“We want to draw attention to this scenario so that other homebuyers are fully aware and don't let their dreams slip by.
jlee-young@postmedia.com
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