(Closed) Home price vs appraisal

posted 6 years ago in Home
Post # 3
Member
3943 posts
Honey bee

We actually offered full asking price on our home, but the appraisal came back $15k lower. This was a few years ago though, when the housing market was quickly crashing.

Post # 4
Member
1944 posts
Buzzing bee
  • Wedding: June 2009

Do you mean price to actually build versus what it’s worth in the end? 

Post # 6
Member
2232 posts
Buzzing bee
  • Wedding: September 2012

Technically asking price and appraisal should be the same or near each other. When Realtors list a property they don’t just pick a random price, it’s based on a method which is just a simplified method of a full out appraisal.

Unless you’re talking about the Tax Appraisal which has nothing to do with market value.

ETA: I think you’re talking about the bank appraisal? Typically the bank will only give you a loan for what they appraise the property at and no more. For example, you purchase the property at $300k, the bank appraises it at $290, you need to cover the 10K with a downpayment otherwise you will not get a mortgage.

Post # 8
Member
46457 posts
Honey Beekeeper
  • Wedding: November 1999

Here appraisal and selling price for newly built spec homes are about the same.

Otherwise selling prices are most often considerably more than appraisal price because the appraisal is only an estimate and  the sale price is driven by the market which is still hot here.

Post # 9
Member
1564 posts
Bumble bee
  • Wedding: September 2012

I don’t think there’s any way to gage this answer since there are so many variables that come into play. In this housing market you shouldn’t be paying for more than it’s appraised at. I’m in New England and everyhting is basically selling for way less than what it will appraise for and from what I hear, though ths area is suffering, it’s not nearly as bad as many other area.

Post # 11
Member
2232 posts
Buzzing bee
  • Wedding: September 2012

@LittleMissPolkaDot:  It doesn’t really matter if you had a crash or not, banks are still really weary. I’m in a part of Canada where houses regularly sell for 50-100K over asking and yet banks will still say no, sorry, won’t approve that loan because it doesn’t fit their more conservative assessment. As long as you have the cash to cover the difference then you’re ok.

Post # 12
Hostess
18641 posts
Honey Beekeeper
  • Wedding: June 2009

We didn’t have a brand new home but appraisal came back $5k less than the offer.  The owner ended up having to reduce the cost because we didn’t want to come up with the extra cash.

We were putting down over 20% already so the downpayment didn’t matter.  Also, real estate is still pretty high here because of defense spending/contractors so prices haven’t changed much but banks are still nervous.

Post # 13
Member
8882 posts
Buzzing Beekeeper

@nickels:  I agree with this. There’s so many factors that come into play. You could try speaking to a realtor for advice.

Post # 14
Member
368 posts
Helper bee
  • Wedding: July 2011

As PP said, if your appraisal comes in lower than the asking price you can (a) renegotiate the price with the seller or (b) make up the difference in cash yourself. 

Also, as people have said banks are very cautious now and appraisals are coming back much lower than they have in the past. 

Post # 15
Member
3943 posts
Honey bee

@LittleMissPolkaDot:  We re-nogotiated with the seller and they came down on the price. The banks won’t typically give you a loan for more than the appraised value, so the sellers didn’t have much of a choice.

Post # 16
Member
13096 posts
Honey Beekeeper
  • Wedding: July 2010

Darling Husband and I put in an offer on a new build yesterday and they builders set the asking price at the appraised value and then refuse to negotiate that price (so as not to hurt the values of their other homes).

ETA: We’re basically negotiating on “extras” for them to include – a fridge, a fence, blind in the windows, etc.

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