Overpriced property -- appraisal before offer? (negotiation, agents, fees, accept)
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We will definitely put that contingency in the contract, but...
I feel uncomfortable offering 240k and waiting for the bank to "correct" the situation.
If you like/want the place... make the best offer that you can justify.
An offer contingent on financing (appraisal) is common.
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Bottom line, we don't want to get stuck in a place worth much less than we paid for it.
bottom line is that this discussion is about less than the last 10% of a contract.
($20,000 vs $242,000) Keep your head in the game.
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I guess the problem is that the guy is *adamant* that it is worth 240k...
And if your lender (appraisal) agrees... then all is good.
If the lender/appraisal doesn't... then the seller will be boxed in with any future buyers/offers.
You really can't lose here (if you really want the unit).
The seller is not going to be able to pull any funny stuff with the appraiser. The appraiser is working for the bank not the seller.
Ok, this was our main concern. We have reasons to believe the seller is being dishonest, such as claiming multiple higher offers that didn't work out, claiming 100k or renovations (there's NO way, my dad does renovations and I have an idea of what it costs to put in a new kitchen), so we were just feeling uneasy about relying on the bank appraisal.
Our nightmare scenarios is this:
We pay 240k, with 50k downpayment + closing fees of ~ 10 - 15k. (The place appraises at 240k with the help of the current owner influencing the appraiser).
4 years from now I am offered a permanent job somewhere else and we go to sell, only to find that the place now appraises for 190k, closer to the comparables in the area. We're out the 60k we put in plus agent fees.
Are we being paranoid?
Again, it's not about being too cheap or wanting to force the guy to sell, obviously we can't, it's just that we don't want to get stuck in a bad decision.
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Location: Ocala, FL
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Even if a homeowner puts $100K in upgrades, it doesn't guarantee that he will get the investment back when the home is sold. This is typically referred to as an "over improvement". The owner can ask whatever they want, but the market will only bear so much.
Had a client insist on listing their home almost $100K higher than the average sale price in the same community they lived in and when the home didn't sell in 2 months they blamed me. Not going to make that same mistake twice.
Not sure how you think the seller can influence the appraiser.
Well, it's a human affair -- not saying he's going to bribe the guy, but he's going to be there when the appraisal is done. He claims he has a previous appraisal from a few years ago at 280k.
What Captain Bill (and others) said again. You seem to have the idea that, if only the seller saw the results of an official valuation, he would change his mind. It doesn't usually work that way. If it's truly overpriced, the only thing that MAY change his mind is an extended time on the market without a sale.
What Captain Bill (and others) said again. You seem to have the idea that, if only the seller saw the results of an official valuation, he would change his mind. It doesn't usually work that way. If it's truly overpriced, the only thing that MAY change his mind is an extended time on the market without a sale.
I see, thanks. It has been on the market for 240 days, and he has dropped it 40k. Unfortunately, that doesn't seem to be enough for today's market. I guess we are going through with the pre-appraisal. We may be overly cautious, but I'd rather be that than reckless... it's practically our entire savings...
If you need to take a mortgage make your offer contingent on the financing.
Either it comes in at that level or it doesn't.
If it doesn't then you have something to negotiate with.
That sounds good, but, the buyer still has to pay $300-$500 for an appraisal ... and the seller may still be unwilling to move on the price.
It's pretty easy to check the tax appraiser's records in most areas and compile a list of all recent sales in any particular condo complex (or area). When units are in the same building and have consistent floor plans, the difference usually comes down to upgrades. I've made condo offers before that have included a list of comps ... asking that the seller justify their 'higher listing price.' It's amazing how quickly emotion sometimes 'flies out the window' in the face of hard facts. If you want to buy the property at a fair price, help convince the seller of what constitutes a 'fair price' --- and/or save yourself the cost of an appraisal.
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