Reply
Visitor
vinceshining
Posts: 3
Registered: ‎11-16-2012
0

what happen when an appraiser appraised home less than offer price???

I recently had my offer on a home accepted.  after finding a loan and finding an appraiser,  I found out from my loan broker that my home is appraised for 20k less that I offer to 395K.  My loan agent sent a copy to the appraisal to the listing agent.   Does the listing agent and seller normally sell it lesser?  Since it took us a while to find this home (what we look for) and we know we kinda over offer it, what can we do? Does my agent ask the seller to sell it for less?  have anyone gone thru this before?  and advise?  Does this slow down the process closing ?  what should I do period? by the way, the home is reo bank own

Silver Contributor
DrivingSideways
Posts: 547
Registered: ‎03-03-2009
0

Re: what happen when an appraiser appraised home less than offer price???

If you're in a hot area, the seller will require you to come up 20K in your price or cancel the deal and wait for somebody else to come in with all cash offer that doesn't require appraisal.

 

If the house has been sitting for a while or is truly overpriced, they may meet you in the middle.  If you think the appraisal is too low, I believe you can challenge it or pay for a second one.

Platinum Super Contributor
Nanomug
Posts: 10,379
Registered: ‎05-30-2009

Re: what happen when an appraiser appraised home less than offer price???

It's negotiatble. Is this a short, reo, flip or standard? It matters.

 

This can be a tricky situation especially if the buy doesn't have the funds to pay the difference and the seller needs the funds to buy another home.  

 

First sit down with your agent to review the appraisal for accuracy.  Are the home details correct?  Missing a bathroom or fireplace?  Are the comps nearby and within the last 1-3 months?  Are there comps that should be there?  If there are errors that can be dealt with.

 

Ultimately the seller will do one of these three things:

1. stick to the contract price (this is where the appraisal contingency allows you to cancel)

2. accept the appraisal

3. split the difference.

 

 

Trusted Contributor
gree3616
Posts: 198
Registered: ‎02-05-2010
0

Re: what happen when an appraiser appraised home less than offer price???


vinceshining wrote:

I recently had my offer on a home accepted.  after finding a loan and finding an appraiser,  I found out from my loan broker that my home is appraised for 20k less that I offer to 395K.  My loan agent sent a copy to the appraisal to the listing agent.   Does the listing agent and seller normally sell it lesser?  Since it took us a while to find this home (what we look for) and we know we kinda over offer it, what can we do? Does my agent ask the seller to sell it for less?  have anyone gone thru this before?  and advise?  Does this slow down the process closing ?  what should I do period? by the way, the home is reo bank own


Not trying to be judgemental but just curious, why would you buy a house that is overpriced?

Platinum Super Contributor
Nanomug
Posts: 10,379
Registered: ‎05-30-2009
0

Re: what happen when an appraiser appraised home less than offer price???

Appraisals are not always accurate.  Two appraisers could come up with different values on the same day.  Over the years I've seen many errors in the home data and poor choices of comps.  Sometimes they can be fixed and other times not.  One that the appraiser refused to fix was missing a fireplace, a wet bar, a bedroom and two decks.  

 

Whether or not the home is overpriced is different than whether the appraisal matches the contract price. Looking at comps and condition is the best start to making an offer.  

 

Overpriced is an interesting term.  While I understand the general intent of the term in relationship to real estate I'm not sure what it means in home buying where price is determined by what people will pay.

 

 

 

 

Trusted Contributor
gree3616
Posts: 198
Registered: ‎02-05-2010

Re: what happen when an appraiser appraised home less than offer price???


Nanomug wrote:

Appraisals are not always accurate.  Two appraisers could come up with different values on the same day.  Over the years I've seen many errors in the home data and poor choices of comps.  Sometimes they can be fixed and other times not.  One that the appraiser refused to fix was missing a fireplace, a wet bar, a bedroom and two decks.  

 

Whether or not the home is overpriced is different than whether the appraisal matches the contract price. Looking at comps and condition is the best start to making an offer.  

 

Overpriced is an interesting term.  While I understand the general intent of the term in relationship to real estate I'm not sure what it means in home buying where price is determined by what people will pay.

 

 

 

 


Over priced to me is when I see properties selling today within 5 to 10% of what they were in 2005 but who knows, maybe this will be the 'new norm' for a while.  All I know is that when the supply is low of anything (except for a bare essential and I don't  have to buy right now), I wait until there's more of it.

Gold Contributor
BobPhillips-RE
Posts: 1,701
Registered: ‎12-13-2010

Re: what happen when an appraiser appraised home less than offer price???

"Waiting until there's more of it" - meaning available inventory, to select from - may be a while, and some people would prefer not to wait.

 

Who's to say what today's values are high or low vs. some other point in time?  Today's prices - for many properties - are back to where they were in 04 or 05, having previously bottomed back at 02 or 03 figures, but risen from those.

 

Who's to say they won't continue to climb, or that previous lows weren't simply an overreaction?

 

This is a tough market for buyers right now - especially for any who don't have at least 20% down - or, for those who thought they'd have plenty of time to cherry-pick, while houses cruised along the bottom. ( Which, as it seems, in retrospect, was any time from January of 2009, until January of 2012.)

All this, of course, is merely MY opinion. Thanks for reading.

Bob Phillips - Realty ONE Group - South Orange County, CA
Trusted Contributor
gree3616
Posts: 198
Registered: ‎02-05-2010
0

Re: what happen when an appraiser appraised home less than offer price???


BobPhillips-RE wrote:

"Waiting until there's more of it" - meaning available inventory, to select from - may be a while, and some people would prefer not to wait.

 

Who's to say what today's values are high or low vs. some other point in time?  Today's prices - for many properties - are back to where they were in 04 or 05, having previously bottomed back at 02 or 03 figures, but risen from those.

 

Who's to say they won't continue to climb, or that previous lows weren't simply an overreaction?

 

This is a tough market for buyers right now - especially for any who don't have at least 20% down - or, for those who thought they'd have plenty of time to cherry-pick, while houses cruised along the bottom. ( Which, as it seems, in retrospect, was any time from January of 2009, until January of 2012.)


Yes Bob...there's only two options....wait or not wait...not very complicated.  I have decided to wait since I am in a good position to do so.  No one knows what's going to happen but I happen to believe prices are being artifcially propped up by the low inventory and interest rates but am betting that will change.  In the meantime, I continue to watch my current residence jump in value (now triple what I originally paid 10 yrs ago) and my stock picks double.  LIFE IS GOOD!

Contributor
HouseFisher
Posts: 17
Registered: ‎06-12-2012
0

Re: what happen when an appraiser appraised home less than offer price???

Will HUD negotiate on price if the appraisal comes in less than the offer price?    

Gold Contributor
BobPhillips-RE
Posts: 1,701
Registered: ‎12-13-2010
0

Re: what happen when an appraiser appraised home less than offer price???

[ Edited ]

If they are providing the financing, there's no appraisal required on a HUD REO, so, it's not an issue.  If your objective is to get your own loan, and to use your OWN appraisal as a device to be able to negotiate the price on a HUD purchase, it would likely fall upon deaf ears, or a resounding "NEXT". ( As in NEXT buyer, please.)

All this, of course, is merely MY opinion. Thanks for reading.

Bob Phillips - Realty ONE Group - South Orange County, CA