Please help! I am two weeks before closing and I just find out the house I am buying in PA was listed incorrectly as a single family unit when it has two rentals attatched to in in the back that you cannot see. In the original MLS listing it was listed with two rentals and recently that information has been removed. My lender says the appraiser will NOT appraise it as a single family unit. The sellers are upset as they are closing also on their home . My lender says there is nothing he can do since the appraisal wont go through. How can they sell a house and list incorrectly?

Talk to your agent and your lender. Since it's multi-family, you may have to make changes to the agreement of sale (to reflect that it is a multi-family), as well as the type of financing you can use. As for the home not being listed correctly, that's something the seller's agent probably should've known. But I'm curious, didn't your agent see the additional units when they showed you the property?

According to the lender I would not qualify for a multi family unit. My agent/broker was quite aware of the other units attached, but continued to report it as a single unit. It is now a blame game as the lender is blaming my broker and my broker is blaming the sellers agent/listing agent for the unit being listed as a single. We are set to close on the 15th and I have already invested 2,000 in hand money that I do not if I will get back now, on top of a 250 appraisal fee.
Ugghhhh
Is it hopeless and should I just start all over again or continue pressing.
I sincerely appreciate your reply thank you!

Why does your lender say you will not qualify for multi-family?

Contact a different lender.

due to my credit score of 530, I have only been approved for so much and if it gets appraised as a multi I will not get additional money for the loan I guess

Regardless, if it is a single unit or multi-family, if the price remains the same, why would you need additonal money? If you were already approved for an amount, and you are moving toward closing, something is not adding up. ???

I would think to contact another lender. Why did you pay a $250 appraisal fee if they refused to appraise the home...get your money back.
You said you put out around $2,000 out of pocket already. Was the $2,000 deposit money?...your agent needs to straighten this out with the listing agent. If it was listed incorrectly, I think this would fall onto the listing agent. Doesn't the listing agent's E&O insurance cover a mistake like this?

Was your agreement of sale (contract) contingent upon obtaining a mortgage? If so, you can probably get out, and get your money back. If not, I would see if you can get a mortgage commitment extension...some added time to get financing.

not legal advice. just my thoughts.

"Regardless, if it is a single unit or multi-family, if the price remains the same, why would you need additonal money?"

Because it's not just about price they were probably underwriting a sfr not a multifamily loan.Each loan has different underwriting requirements based on what type of loan it is multi-family is different than sfr.The credit score of 530 is very low usually at that score you are having to put 20 percent down or at least 10.If they didn't tell you that it sounds like you have an new agent,or loan officer or both.

Look for a contingency in the contract to get out of it and move on if you can't get it approved under mutli-family.Also look for a loan company that doesn't hit you up for the appraisal fee upfront.Some companies build it into there operational costs as a loss leader and you only pay it if you close on the property.

I understand what you are saying, but if you read her post before mine, she says if she has it appraised as a multi-family, she will need to have more money loaned to her. Not out of pocket. Well, that is how I understood it.

I dont understand why the appraisal was paid for, but never done.
If it was never done, she should get her money back. No services rendered, then you are entitled to a refund. She should contact the appraisal company and ask for her money back. If they refuse, put a stop payment on the check if you can.

I think the issue may be in the terminology. When a lender says house *will not appraise* it could well mean the appraiser went out, did the appraisal & the property would not fit into the UW's guidelines. As in *sorry it did't appraise*.

I can see why this would be confusing.

Super is correct. A FICO of 530 isn't enough to get financing on an SFR most of the time these days. A multi family is income property & will have to be financed as such. If I'm reading correctly tho this is 3 units which would still be ok since 1-4 units don't have to go into commercial financing.

I think what happened here is that the property won't appraise to satisfy UW guidelines.

As for having it listed correctly I don't know of any case in my area where an agent got anything other than a scolding for that since the MLS is directed at other agents. I see incorrect info in the MLS all day long.

If that terminology is the case, then I understand. Makes sense.

If it was listed for a certain price as a SFR, but turns out to be a 3-unit multi with a higher value, I would think it would appraise for more $$$, and they would be able to purchase if they have an accepted sale price and the seller is not trying to now raise the price on it.

It's possible that the appraised value as a multi just wasn't there to support the selling price.

If the appraisal was done, ask the appraiser to forward a copy of the appraisal report to you. They may need permission from the lender to do so, but ask anyway. You should also check into other lenders. I've had clients with low credit scores get 100% financing, even for multi-family properties (but those were owner-occupied). If you want the phone number, just send me a PM. Good luck!

The appraiser will not appraise the multi-family as a single family because that would be fraud. You should get your money back because the appraiser is not accepting the assignment due to the circumstances. Also, you will not get a multi-family form done for $250.
It is a totally different loan when comparing sfr to mfr. Either the listing agent is a rookie or stupid for making such a dumb mistake.

j

There are different lending criteria for single family and multi family properties. Also, some banks may not be able to lend on multifamily. Typical multifamily down payments are around 40%. I doubt this buyer is putting 40% down.