921,504
Many buyers enter into a purchase agreement (in Florida) fully anticipating to deliver a price beat down for inspectation issues and further based on the appraisal. The voice in their head said, "Don't worry, the bank will NEVER approve this price!"
Seller always say they sold to low and buyer believe they paid too much.
So, nothing has changed.
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Bill Dandridge
Roanoke, VA
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Sandy Padula & Norm Pa...
, CA
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Shannon Slater
Pilot Point, TX
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Roy Kelley
Gaithersburg, MD
1,543,634
I think that is a reflection on the expectations their agent set up. In multiple offers where they "over pay" for a house to win the bid, they can have the expectation that the appraisal will help them lower the price back down. Two problems: 1. the seller may stick to the price and go to the next offer if you attempt this (they have the leverage of other offers willing to step up). 2. that agent created an uncommitted buyer (buyers remorse) under that premise if that's their underlying hope and only reason they did it.
I always share an appraisal as validation for what they paid, proof of equity if it's higher and if lower within reason, not a shock because if I've executed my comps correctly; they knowingly bid over with the intent to cover if the seller won't budge. My buyers know roughly how much cash out of pocket I'm exposing them to up front with the offers we write in our sellers' markets.
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Sandy Padula & Norm Pa...
, CA
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Shannon Slater
Pilot Point, TX
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Roy Kelley
Gaithersburg, MD
613,494
I have never had that problem, but I manage the buyers expectations and don't show them homes they cannot afford.
Eve
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Shannon Slater
Pilot Point, TX
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Sandy Padula & Norm Pa...
, CA
1,153,794
This will be my first bookmarked Q &A Shannon. Investor Buyers need to see this too, when a property is purchased subject to the appraisal the result will be perceived value / perceived price all day long
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Sandy Padula & Norm Pa...
, CA
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Shannon Slater
Pilot Point, TX
292,685
I think buyers and sellers enter contracts on a price they think the property is mutually agreed upon and then it's up to the appraiser to ratify that price is right based on their expertise . The problem comes when appraiser are not familiar with area and in the past the appraiser were coming in at 90-80% if value which just so coincided with buyers down payment and the loan amount to be borrowed.
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Sandy Padula & Norm Pa...
, CA
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Shannon Slater
Pilot Point, TX
7,836,129
Appraisers should certainly be able to assume that the home sellers and the home buyers agree on the price when there is a ratified contract.
On the other hand, many buyers are hoping for a price reduction.
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Sandy Padula & Norm Pa...
, CA
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Shannon Slater
Pilot Point, TX
4,882,355
Good question and some good answers posted here.
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Shannon Slater
Pilot Point, TX
4,319,419
Shannon Slater you are right!
There was a post here that mentioned that offer $50K higher, win the multiple bids and hope the appraisal takes care of 'RIGHT PRICE'!
Good idea? I don't think so!
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Shannon Slater
Pilot Point, TX
1,712,676
A legal contract should be honored by both parties and there is the ability to sue for specific performance. We do negotiate repiars often, and if the home doesn't appraise that can also be an issue, but in my 26 years I have never had someone try to game the system.
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Shannon Slater
Pilot Point, TX
4,272,548
I have had buyers that use the appraisal as a fall back position. The ones I have a problem with are the ones that get into a bidding war for a property and it won't appraise for value. They then try to back out but I cover my butt by having them sign a addendum that says that they understand they are responsible for the over listing price balance...
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Shannon Slater
Pilot Point, TX
4,800,082
I don't see that happening in my area. There may be some buyers getting some poor advice from someone, but they should be ready to pay the contract price.
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Shannon Slater
Pilot Point, TX
316,098
Ha, remember the 'good old days' when buyers were only mad if it appraised for more than the contract price? I prepare my buyers and do a lot of comps to get them to write at an appropriate price. I suppose some folks are just born hagglers and gamers, though.
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Shannon Slater
Pilot Point, TX
699,277
A contract, here, is a completely executed contract unless their is a congingency. Too bad if the appraisal came in at sales price.
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Shannon Slater
Pilot Point, TX
1,725,996
You find all sorts in this business. Perhaps the buyers agent told them they were coming into an equity ownership at closing?
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Shannon Slater
Pilot Point, TX
1,683,912
When they write the contract, it is determined what their buying power is.
39,849
Thanks everyone for your input! Maybe this was just two rare occurances and I have not seen it before in our market but I thought I would ask. It's good to get input from agents.