House assesment for financing

I had some crazy good news yesterday about the house situation yesterday. I'm still pinching myself.

We've been trying to close on our new Union City house for the last week, and the assesment has been holding things up a bit. Gone are the days when banks gave away mortgage money like mardi gras beads - now they are not only doing an assesment, they do a physical inspection. It just so happens that there aren't very many single family homes in UC (mostly multi family and condos), and there hasn't been a lot of home sales recently. So, that means that there isn't much to compare our property. In fact, there were only FOUR, as in 4, like quatro, over the last 12 month period. Isn't that insane? Four single family homes sold in this city in the last twelve months. That sounds too ridiculous, maybe it's four homes in same size/neighborhood? In any case, their is not a lot to compare to.

So the assesment happens, and I get a call from the real estate agent informing me that the value of the house was assesed at $260k. Uh, that's weird - we fiercely negotiated down from a starting point of $339k. In fact, our first offer on the property was $269k, and we recognized that it was a total low-ball offer. So low-ball that the sellers made a point of asking their agent to relay to us how insulted they were at our offer. So after weeks of back and forth, settling on a price of $305k, knowing it was more than we wanted to spend but we loved the house, the agents call about the assesment spun me into a panic. Does this mean the bank will only lend us funds based on a maxiumum of $260k and we have to find bridge financing for the extra $45k? That was my first reaction, and I instantly thought - we're done, we're not buying that house, we can't find another $45k. I was lamenting my aggressiveness in having already ordered 5 lilac bushes for delivery in April. BUT NO! The assesment means that we get the house for $260k instead of $305k. I don't know all the details yet but I think the sellers options were 1) take the assesed value and be done with it 2) take the property off the market and wait for economy to come out of the shitter.

I have to admit that I feel a certain vindication now for our initial "insult" low-ball offer. I'm also really happy to save some downpayment money. We're going to put in the swank new kitchen that we thought we'd have to put on hold. That will be a story for tomorrow.