UGH! DH vent! Why are they so stubborn??

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Posted 12/28/2012 by **buglvr12** in NSBR Board
 

**buglvr12**
StuckOnPeas

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Posted: 12/28/2012 1:17:57 PM
So we are in the process of selling our house. We actually have already moved out and new owner is leasing from us until we close in January. Well, the appraisal came back $5k lower than our sales price.

We knew we were aiming a little high but this lady really wanted our house and with her asking us to move out a month early...she was trying to make it worth our while. Ok, fine....she's not in a place to come up with another $5k so an easy solution would be to come off the sales price $5k, right?? While I'm not happy about it, I'm not willing to lose the sale of the house over it. But DH is just making a big issue out of it and is digging his heels in saying that "someone" i.e. our agent, the buyer....needs to fix it. What the heck does he want them to do??

Sorry to vent but sometimes I think he loses sight of the goal and HAS to be right instead. Ugh...men!

freecharlie
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Posted: 12/28/2012 1:19:38 PM
Ask your DH if he'd rather eat the $5,000 or if he wants to have to pay the mortage on two houses if she decides she doesn't want it for the extra 5K.


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**buglvr12**
StuckOnPeas

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Posted: 12/28/2012 1:21:13 PM

Ask your DH if he'd rather eat the $5,000 or if he wants to have to pay the mortage on two houses if she decides she doesn't want it for the extra 5K.


Well, here's the thing....we haven't found another house yet and are living with his cousin.

cdnstorelady
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Posted: 12/28/2012 1:22:20 PM
We knew we were aiming a little high but this lady really wanted our house and with her asking us to move out a month early...she was trying to make it worth our while. Ok, fine....
__________________________________________________

I'm confused... has she signed an agreement to buy your house at a certain price and now that the appraisal has come back lower wants it reduced to the appraisal price?

BudgetMama
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Posted: 12/28/2012 1:24:11 PM

I'm confused... has she signed an agreement to buy your house at a certain price and now that the appraisal has come back lower wants it reduced to the appraisal price?


same here? If she agreed to a sales price, now is really not the time to renegotiate - esp since she's LIVING in the house, lol!

**buglvr12**
StuckOnPeas

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Posted: 12/28/2012 1:26:00 PM

I'm confused... has she signed an agreement to buy your house at a certain price and now that the appraisal has come back lower wants it reduced to the appraisal price?


Yes. And this is my DH's stance on it. He says she signed the contract for a certain price so even though the appraisal came in lower then she should be responsible for the difference.

While I understand where he's coming from, the buyer had no idea what it would appraise for. I just do NOT want to have to move back into that house.

Ihaveonly1L
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Posted: 12/28/2012 1:33:46 PM
It doesn't matter if you agreed on a price. If the appraisal came back low, the bank won't finance it at a higher rate. If you don't move on the price, it most likely won't help because it will happen with the next buyer. We bought last May. We had agreed on a price $8,000 more than the appraisal came back at. We all thought it was low. We could have ordered a new appraisal, but were told by the bank that 99% of the time they take the first one anyway. It was in our favor, but the sellers weren't happy (rightfully so). If I were you, I'd sell it and be happy it's over.


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BudgetMama
StuckOnPeas

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Posted: 12/28/2012 1:34:26 PM
You DO realize you have the upper hand here, don't you?? She wanted the house BADLY, she MOVED INTO IT, and she set the asking price FIRST, and then she SIGNED A CONTRACT. It would cost her at least 5k just to move out and find another place after she's paid movers, fees, rent to you, etc.

Tell your realtor that a deals a deal.

cdnstorelady
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Posted: 12/28/2012 1:35:51 PM
While I understand where he's coming from, the buyer had no idea what it would appraise for.
_____________________________________________________

Well is she a grown woman who has all of her faculties in order? And you didn't hold a gun to her head? I assume you didn't take advantage of her in any way?

Just as people can choose (sometimes foolishly) to buy a house without an inspection, she can choose to buy a house without an appraisal. As appraisal is just an estimate. Some people might say a particular house worth more or less than the appraisal depending on all kinds of factors and you have no idea, nor should you care, what her reasons for agreeing to your price were. If she's changed her mind, that's her problem - she owns your house..... Your DH is completely right.

If she signed a contract to purchase a house without fully understanding that she would be legally obgligated to buy this house regardless of what the appraisal showed... well again, she's an adult.... If the appraisal came back $10,000 higher than the sales price, you would not have been able to make her pay more. It works both ways..... Does she have a realtor?

freecharlie
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Posted: 12/28/2012 1:36:37 PM
Sorry, I assumed you had moved into something new already.

Since closing hasn't happened and the bank probably won't finance another $5,000 and she doesn't have the liquid cash to come up with it, is your husband willing to let the sell go?


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cdnstorelady
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Posted: 12/28/2012 1:37:40 PM
ETA - and whether or not the bank will finance a price more than the appraisal should be irrelevant unless the deal was conditional upon financing. If it wasn't a conditional sale, she owes you the money regardless of how much the bank will loan her. It's her problem, not yours.

Mimima
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Posted: 12/28/2012 1:44:35 PM
What does your contract say is the remedy in case of a low appraisal?
Having said that, I tend to agree with you.


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Mallie
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Posted: 12/28/2012 1:53:01 PM


He says she signed the contract for a certain price so even though the appraisal came in lower then she should be responsible for the difference.


Was her offer contingent upon financing?

**buglvr12**
StuckOnPeas

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Posted: 12/28/2012 1:55:41 PM

Was her offer contingent upon financing?


I don't recall offhand. I will have to look at the contract to see.

Christine58
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Posted: 12/28/2012 1:58:54 PM
You need to talk with your real estate broker ASAP



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**buglvr12**
StuckOnPeas

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Posted: 12/28/2012 2:06:38 PM

You need to talk with your real estate broker ASAP


I have. Either the buyer comes up with the difference or we come down on the price. The buyer's agent has already said she could not come up with the difference. Now, I don't know how truthful that is but at this point I really don't care. I just want to be done with that house. $5,000 is not worth all the heartache we had in that house...too many bad memories.

And maybe it is an emotional thing for me but with DH it's the bottom dollar and being right.

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Posted: 12/28/2012 2:16:21 PM
If the buyer doesn't have the cash or want to give you the cash then you either have to lower your selling price or not sell.

This happened to the original buyers of our first home. They "sold" it for more than it was worth. The buyer didn't have the cash and the seller wouldn't budge. Consequently the sale fell thru.

After that one fell thru the seller had 2 more fall thru due to not reducing the price. So the house was on the market again, and that's when we found it. At that point the seller had reduced the price. **We found all of this out after we bought the house.


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cdnstorelady
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Posted: 12/28/2012 2:16:50 PM
Well the buyer is legally obgligated to come up with the money. You are not legally obgligated to come down on the price. But if she's going to default on the purchase and you're going to have to sue her for the money, it may end up costing you a lot more time/trouble and heartache than it's worth. And, although you should check with this your lawyer, it's possible that you'll not be allowed to sell the house until the suit is ended....

Let's face it... she probably has $5,000 somewhere - it might just not be handy - retirement savings account, etc... I don't think your agent represented your interests very well (no her agent her interests) if there was a chance this could happen and it never came up before now. By the time she pays some legal costs, moving costs, it will probably end up costing a few thousand anyway.

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Posted: 12/28/2012 2:22:44 PM
I'm a realtor and I'm astounded by the people who think that you should try and stick it to her over $5k. Here's the deal, you can have the agreed on purchase price minus the $5k or you can have nothing.

If she can't get financing the deal is dead. It doesn't matter if your contact was contingent on financing or not if she doesn't have the money your deal won't close. Period. Tell your husband to suck it up and deal. Ask the agents if they'll kick in on commission. I do it for clients occasionally based on sale price and level of assholianness of the client.

Fact of the mater is the woman is living in your house already and evicting her if the deal goes south would cost you as much if not more than you are going to lose on the appraisal, plus the time on market.


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Posted: 12/28/2012 2:26:39 PM
Could you offer to meet her in the middle?

**buglvr12**
StuckOnPeas

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Posted: 12/28/2012 2:27:16 PM

Fact of the matter is the woman is living in your house already and evicting her if the deal goes south would cost you as much if not more than you are going to lose on the appraisal, plus the time on market.


This is EXACTLY my thoughts!

cdnstorelady
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Posted: 12/28/2012 2:31:03 PM
I'm a realtor and I'm astounded by the people who think that you should try and stick it to her over $5k.
______________________________________________

"stick it to her"????? Who's trying to stick it to her? She signed a legally binding agreement without knowing what the appraised amount would be. If she couldn't come up with a difference if there ended up being one, she never should have signed it. And her realtor should have been advising her and the OP's relator should have been advising her not to move into the house until the damn appraisal came back if it was going to be an issue coming up with a little extra money.

These people (the OP) moved out of their house and have been living with relatives because this woman signed a legally binding agreement saying she would/could pay them an agreement upon amount for their house......I can't believe that you think they should drop the price as soon as the woman cries poor. If she doesn't have the ability to raise and extra $5000, she should NEVER have signed an agreement under these circumstances.

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Posted: 12/28/2012 2:31:13 PM
kind of surprised you let someone move into your house before it was all settled. You might have a contract that says she'll do xxx. But she's also living in your house and if you evict her, good luck getting your money back when she decides to punch a hole in every wall on the way out.


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Posted: 12/28/2012 2:39:36 PM

"stick it to her"????? Who's trying to stick it to her?


The sellers. Selling someone a home for more than it's worth is sticking it to them. That's why banks won't do it. It doesn't make sense.


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Posted: 12/28/2012 2:40:31 PM

It doesn't matter if you agreed on a price. If the appraisal came back low, the bank won't finance it at a higher rate.


That.

Nobody else is going to give you the additional $5k either. You need to come down on your price.




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Posted: 12/28/2012 2:41:01 PM
Offer to split the difference.....or drop the price...



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Posted: 12/28/2012 2:46:48 PM
It doesn't matter if you agreed on a price. If the appraisal came back low, the bank won't finance it at a higher rate.



^^^^^ yup, that.

Can you add up the costs of evicting her, putting it back on the market, paying the mortgage for some undetermined time till you get another offer, etc etc. and hopefully get your husband to see that it's not worth it for just a $5000 difference in the price?? If you don't take her offer, you may lose a lot more than that $5000 in the long run.




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Posted: 12/28/2012 2:50:20 PM

"stick it to her"????? Who's trying to stick it to her? She signed a legally binding agreement without knowing what the appraised amount would be. If she couldn't come up with a difference if there ended up being one, she never should have signed it. And her realtor should have been advising her and the OP's relator should have been advising her not to move into the house until the damn appraisal came back if it was going to be an issue coming up with a little extra money.



She signed a legally binding contract, contingent on the appraisal coming in at or above value.
In the market that I work in, low appraisals are more and more common. It has nothing to do with bad realtors or bad advice, it has everything to do with a changing market.
As an agent, I'd have advised against having her move in prior to closing , but that horse has left the barn now.


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Posted: 12/28/2012 2:56:07 PM

"stick it to her"????? Who's trying to stick it to her? She signed a legally binding agreement without knowing what the appraised amount would be.


And every contract Ive ever seen with financing is contingent on appraisal. But you go on ahead and pretend to know more than the person who does it for living.


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Posted: 12/28/2012 3:13:50 PM
As I mentioned above, we recently had this happen to us. We had agreed on the price, but the bank said no. We were new to the area and already thought we were getting a good deal, so we were just as surprised as the sellers were. Their only choice was to reduce their asking or void the deal.

You may be able to get some money back if she would cover some other expenses you were going to (like closing) but she won't have to.


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Posted: 12/28/2012 3:23:06 PM
A friend of mine went through the same thing last month and for the same reason and same amount. They ended up compromising - they came down $2,500 on the price a d the buyer had to put up an extra $2,500

Her hubby was ready to completely forget it and for a while she thought it was over but luckily she convinced him to come down $2,500


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kimberly38
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Posted: 12/28/2012 3:28:26 PM
Previous mortgage loan processor here and have worked with many underwriters, lenders, etc.

Just because you sign an agreement of sale stating a sale price, it comes down to the appraisal price. The appraisal price is what the home is actually worth and no lender is going to approve a mortgage for more on a home than what it is worth. And most times, a buyer should not pay more for a home than what it is actually worth.

Now, a few years ago, in my area, when the market was great, people were willing to spend some extra and pay more than the home was worth, but that extra comes out of their pocket. No lender will lend you more than what your home is deemed worth of.

Honestly, in this case, the home is not worth what it was listed at. You have someone in your home who is willing to buy said home. If I were her, I would not be paying more for the home than it is actually worth.

And as to your husband saying she signed for this amount, yada, yaha...you might want to check your agreement more carefully. Most agreements will state a listing price, but somewhere it usually states depending on appraisal price which is actually worth of home. So, your dh may be complaining for nothing, because it might already be in the agreement that appraisal price is the true price, not the listed price or signed for price. You should check with your realtor if you cannot find this info. in your agreement of sale.

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Posted: 12/28/2012 3:31:15 PM
I would just have her pay the 5K in cash. She agreed to the price and unless she put in a contingency that the house must appraise for "X", too bad for her. If she (or her Realtor) were smart, the offer to buy would have contained an appraisal value requirement. If not, too bad, so sad. And we're talking 5K, it isn't like it was 50K short. I'd just have her pay cash at closing for the amount the bank won't cover with her loan.



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kimberly38
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Posted: 12/28/2012 3:36:22 PM
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Posted: 12/28/2012 2:31:03 PM
--------------------------------------------------------------------------------
I'm a realtor and I'm astounded by the people who think that you should try and stick it to her over $5k.
______________________________________________

"stick it to her"????? Who's trying to stick it to her? She signed a legally binding agreement without knowing what the appraised amount would be. If she couldn't come up with a difference if there ended up being one, she never should have signed it. And her realtor should have been advising her and the OP's relator should have been advising her not to move into the house until the damn appraisal came back if it was going to be an issue coming up with a little extra money.

These people (the OP) moved out of their house and have been living with relatives because this woman signed a legally binding agreement saying she would/could pay them an agreement upon amount for their house......I can't believe that you think they should drop the price as soon as the woman cries poor. If she doesn't have the ability to raise and extra $5000, she should NEVER have signed an agreement under these circumstances.


Again, previous mortgage loan processor here,

Almost all agreements of sale are first signed on a contingent price agreed by both parties. Appraisals are usually not done until an agreement of sale is completed first. So, there is no way of either buyer or seller knowing for sure what the property will actually be deemed worth until said appraisal is done. So, yes, most people do sign a legally agreement of sale before the appraisal is even done. As I said, usually somewhere in the agreement of sale, it states this. In a good market, this would not be an issue. I am not sure where you are at, but right now, most areas are not in a seller's market, as they were a few years ago, but it is now a buyer's market. Which means, the buyer in today's market, usually has the upper hand.

In any case, in this scenario, your home is not worth what it was stated it is worth. No one in their right mind should pay more for a home than what it is worth, because if you lose said home in a fire, say, you are not going to make that extra money back. Unless, you really, really love that house, when you pay the extra, realize that you are paying that knowing that you will not get it back in the case of maybe a fire. The insurance company is only going to reimburse you what the house is deemed worth of.

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Posted: 12/28/2012 3:37:22 PM
Is she paying you rent while living in YOUR house? And is she financing 100% of the mortgage (are financial institutions even doing that now?).

I think the others have said it: it's going to cost you, and her, close to $5K in administrative, moving and legal expenses to extradite yourselves from this situation. Not to mention, you go back through the whole marking schtick again, and probably won't get the extra $5K in a new offer anyway thanks to the low appraisal.

Split the difference and complete the sale.


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cdnstorelady
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Posted: 12/28/2012 3:42:52 PM
Okay, obvious different markets. We bought our house with an unconditional offer. While I know that's not the norm, there's a lot of pre-approvals that go on. I asked DH what would happen if our house's appraisal came back $5k less than our offer, i.e.if it would be a problem with the financing and he said no because we were only financing 50% of the price, the rest was equity so maybe that's the difference in what I was thinking....

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Posted: 12/28/2012 3:51:41 PM
You come down $2500, she pays $2500 more. You both meet in the middle. Surely your DH didn't expect to sell at the price it was listed at, right? Didn't he expect there to be some bargaining during the process?

BTW- my FIL was trying to buy a house that ended up appraising for less than the selling price. Eventually (a day or two later) the seller/bank had it worked out, so it wasn't totally a dead deal.


PeaMac


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Posted: 12/28/2012 4:05:09 PM

And every contract Ive ever seen with financing is contingent on appraisal. But you go on ahead and pretend to know more than the person who does it for living.
My thoughts exactly. I've never seen any contracts not contingent upon appraisal (for financing purposes).

Ihaveonly1L
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Posted: 12/28/2012 4:12:18 PM

Okay, obvious different markets. We bought our house with an unconditional offer. While I know that's not the norm, there's a lot of pre-approvals that go on. I asked DH what would happen if our house's appraisal came back $5k less than our offer, i.e.if it would be a problem with the financing and he said no because we were only financing 50% of the price, the rest was equity so maybe that's the difference in what I was thinking...


We also only were financing about half of the house, but our mortgage company only wanted the collateral (house) for the appraisal value.

I would guess you could still just bring your 50% plus the $5,000 and then write the offer, but we didn't want a house that was worth less than what it appraised at because we know that we will need to sell within a few years and we didn't want to lose money on buying it and then lose it again when we sell it to someone else who is only able to finance the appraised value.


Michele

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Posted: 12/28/2012 6:17:29 PM
Ancestor of Pea

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--------------------------------------------------------------------------------
Okay, obvious different markets. We bought our house with an unconditional offer. While I know that's not the norm, there's a lot of pre-approvals that go on. I asked DH what would happen if our house's appraisal came back $5k less than our offer, i.e.if it would be a problem with the financing and he said no because we were only financing 50% of the price, the rest was equity so maybe that's the difference in what I was thinking

The above is not in relation to a different market, but how you are financing your home.

It really does not matter how much is being financed on any home. Most agreement of sales are signed on a price and contingent on appraisal value. If you are lucky enough to only ahve to finance 50% of your home, than good for you. But, no one should pay more for their home than it is actually worth on the market value. Unless, like I said, you are in a very desirable market and there is more than one interested party in said home. This is sometimes when this situation would occur and you get into in a bidding war.

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Posted: 12/28/2012 6:19:44 PM

I asked DH what would happen if our house's appraisal came back $5k less than our offer, i.e.if it would be a problem with the financing and he said no because we were only financing 50% of the price, the rest was equity so maybe that's the difference in what I was thinking....


Your husband would be wrong, 50% of $200,000 is $100,000. If the house appraises at $190,000 then 50% is $95,000. That is the amount that the bank has agreed to loan you, 50% of the appraised value. You would have to make up the difference.


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Loc: Scotland

Posted: 12/28/2012 7:09:26 PM
This thread is interesting to me. I'm not in the US so don't understand the system. In Scotland, you get the house surveyed before making an offer and closing the deal, and you will be given a valuation on which your mortgage will be based.

However a house is surely worth what someone wants to pay for it, isnt it?

If two or more parties are really keen on a place, the offers can go way, way above the asking price ( which will be based on an 'offers over' the valuation or thereabouts, but can be anything the seller wants it to be). A house valued at £150,000 might be put on the market for offers over £148,000 to attract buyers, but may well sell for £180,000 if a few folk are going head to head for it.

Can this not happen in the US?



tamhugh
Ancient Ancestor of Pea

PeaNut 12,875
March 2001
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Posted: 12/28/2012 8:35:43 PM
DH is a real estate appraiser. He is either the most loved or most hated guy in the process of buying a home. If his appraisal comes in low, you either lose the sale or adjust the price. (Or I guess the buyer can come up with the difference, but why would they?)
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