First time home seller: I sold more than what is appraised for....
 

...am I ****ed?

To be fair...this was our first time selling a house. We just went through the whole inspection process with minor fixes.

And then we got our house appraised today....shit. I am 99.9% sure that we are asking $10k-$20k more than what it will appraise for.

Am I ****ed when the appraiser comes back with a significantly lower appraisal than what we are asking?

I have a feeling that most of the answers will be. "It depends on how bad the buyer wants the house...."

I think if the appraisal comes in for less than the sale price, the financing won't go through unless the buyer pays it down in more cash. But that's the buyer's problem.

They might be able to come back & request you lower the price.

The bank won't loan for more than the house appraises for. The buyer might have a decent down payment so maybe it won't matter but I bet they ask to lower the price.

Usually if the appraiser knows what the purchase price is they will get it up that high or close to it. So

Why wouldn't you get it appraised before you put in on the market? Seems ass-backwards to get one after you've made a deal on it but I'm certainly no real estate expert.

If the guy is paying cash I don't see the big deal.

Do you have a realtor?

Yes....she told us not to worry about it.

We had it appraised a couple of years ago prior to some interior/exterior updates. We asked abut $40k over that appraised value. Got an offer within 2 days of putting it up for sale...

I know it will appraise more than what it did a couple years ago...but it won't be a $40k jump....

The buyer's agent usually tips the appraiser off as to what the offer is. I've bought many homes and always it appraised for just over what the loan/purchase price was.

If the buyers want to buy and the sellers want to sell, the deal will be done. Most of the time.

If you can sell your house for more then it is appraised for....cool. I think you are saying that it WAS appraised for higher back when and now it is going to come in less now then it was from "back when".

If the buyers, in a contract, are willing to buy at +40k and you have not done any repairs...in this market I can't see why the new appraisal would come in less then the first one.

Prices are going up...unless it is in Detriot, pun intended.

And what Tiny said

Tell them Tyler Bray has visited many times.

Yes, THis. Don't worry, the appraiser will come in real close to the contract price. I've bought and sold around 30 properties so I know this.

What type of loan is your buyer using i.e. fha, va, usda or conventional? Each has different guidlines when it pertains to money down and loan to value. If its cash the result will be a simple negotiation to the what your willing to accecpt and what they are willing to pay. I can tell you also that the appraiser doesn't give a shit about what your selling it for and will go strictly from comparably prioperties recently sold within the in a given area. You seriously cannot talk to them about your opinion of the homes value...only suggest or point out other comps you feel are a like property. We have had quite a few come in low lately and it really only boils down to sellers asking way to much. I don't blame anyone for wanting to make a little money but your realtor should be fully aware of what you can realistically expect to get for the home with a compeditve market analysis.

I think they are going FHA, fwiw.

Then they are coming in with 3.5% down and borrowing 95% of the appraised value..

****.

You're paying her points to do all the worrying.

Check your contract...When ever I have a buyer using FHA I make it a contingency....good luck!!

Make what a contingency?

Congrats, now flee that failing state and buy something nice in a non bankrupt area lolz

It is what it is. Right now we have a ton of out of town construction workers that will be here for approximately 3-5 years. They don't want to live in 5th wheels with our climate so they look to renting and even buying which is driving the prices just plain nuts at the moment. Good ol supply and demand.

The market drives the value.

We bought a house for higher than it's appraised value. We simply covered the $5k difference because we wanted the house and we had a conventional loan even though we were first time home buyers. Not sure if an FHA loan changes anything, but it's likely they won't have the funds to bridge the gap between the appraised value and the market value....unless I am missing something?

FHA loan has stricter requirements on values I believe

Also people only need 3% down whereas a conventional loan requires 20 I believe.

Also,FHA loan users have to pay PMI points for the life of the loan now. It used to only be 60 months minimum and 20% equity in the appraised / purchased value.

PMI is the scam they use to allow others to put 3% down. It supposedly helps when people default.

I only put down 10% so I got hit with PMI but I'm already past the equity requirement which is when I found out about the 60month minimum.

I'm not a real estate broker or involved in the biz but I've bought 3 houses and sold 2 so there is that.

Hopefully things work out for you and you can sell in all honesty. Best of luck, where you going to move to?

Thanks!

We are moving about 2 miles down the road (hopefully).

Our kids will be 1 block from their school and have more neighborhood amenities.

We went conventional but didn't do 20% down. We put down about 13% and bought out the PMI from the start. Saves a ton of money when you do that and most people don't realize it can be done.

That's great. I get advertisements from mortgage hustlers telling me I can eliminate my PMI by moving my loan to them. But at 3% fixed for 15 years why would I move to a higher rate and longer term ROFL

I called one of them the other day just to troll them about it.

I had this happen once. We offered about $15,000 more than the appraisal value. I told the seller I was going to walk and he dropped the price by $10,000 and I ate the $5,000. We wanted the home so...

Eerily similar to our situation. Our offer was initially $15k more until the house appraised for less than our offer. We returned an offer for $5k more than the appraisal value and stated if was our final offer. They accepted.

Construction is cyclical. You should sell your house now and then buy it back in five years when the workers all leave and the market goes down.

Pretty good idea! Only problem is I'd have to have a place to live and would end up overpaying for that...

You could always ask for another appraisal.

Funny timing of this thread.
We are soon to be first time home sellers and we actually just accepted a counter offer on a home in Spring Hill.

We're trying to finish up stuff to List this Olathe house by 8/1.

Good luck Neighbor!

Also looking for recommendations for Inspectors / Appraisers

Update: All's good!

:)

So, the appraisal ?

I bought my house with an FHA. The lending bank did its own appraisal and it was 8k lower than the owners'. The owners had to drop the price or not sell to us.

If its a cash sale - you have no issues. However, if buyer is getting a mortgage, someone (you drop price or buyer puts more money down) will have to come up with the difference between appraised value and selling price.

We lived in a townhome back in 2003 that the owner wanted to sell. We had it appraised for $250k, presented it to the owner and watched him laugh. He said he's get at least $400k for it and appraisers are generally off.

We bought our current home instead while he sold the townhome for $409k three weeks after we moved out.

Resurrecting this thread for a question of my own.

We're planning on selling/moving this summer so we had a realtor come over for some advice. She's trying to convince us that it would be better to put the house on the market now rather than in the spring/summer because there is much less competition in the market right now. On one hand this seems reasonable, but I can't help thinking that maybe she's telling us this to drum up business when things are slow.

Has anyone had experience selling in winter vs spring/summer?

Moving always sucks.

Moving when it's cold as $#it outside is miserable. Could be impossible on the day you plan for if there's snow or ice.

I'll bet there is less competition...

Good to hear. It might have taken a 40K jump if comparable sales in the area are in line with what you are asking.

Sold in winter in 24 days.
Realtor told us the same about less competition but I did not put a lot of weight on it as there are also fewer people looking to buy

I listed my house the day before Thanksgiving. I was hesitant and thought it wasn't a great time to sell, but my agent explained to me the stories of best time/worst time are really just fluff.

Are there more houses on the market in late spring and summer? Probably....but mostly because it's easier time for seller's with kids to plan every thing out and have ample time. That being said, when I listed in lat November, I had about 20 showings in the first 2 weeks, 3 offers, and was under contract in less than a month. Closed first week of January.

Bottom line, people are always looking. And buyers shopping in the winter months are usually a little more serious and not the typical window shoppers. But I don't think it honestly makes a gigantic difference either way. Tell your realtor you're going to list when it makes most sense for you.

This is what makes sense to me. You're typically not going to trudge through snow/ice and 20 degree weather to window shop.

I'd agree with the others, if it works for you, list it. I listed mine in June, and that was pretty late to the party. A lot of the summer rush had already happened, so I'd recommend earlier than later. If it doesn't sell through the winter, you've got a jump on the spring.

We've had 2 friends in KC, Liberty and Waldo, both sell their homes this winter for asking price the first couple days on the market, one a cash buyer the day it went on the market. We sold our home last March for asking price in 3 days on the market.

Not sure how that plays into your scenario, but it seems there might not be a bad time to sell in KC right now.

Selling mine now too.

What is bugging me is that I have to pay closing costs for the buyer 3%
So I am basically financing their house. Economic redistribution at its finest. Thanks Obama.

It just means that I have to charge 3% more .

You have to? It's negotiable. I didn't pay any of my buyer's.

That's negotiable. They better be giving you a damn good price or just want out bad.

standard practice here now. This is what happens when you live close to Minneapolis.

If they're going to make you cover 3%, just charge 5% extra :D

That's shitty. I fight like hell against stupid shit like that for my sellers.

Depends on what type of transaction this will be. I own several properties and have purchased and sold many houses and this has happened to me a few times. Most recently last year.

IF cash transaction - you're fine, providing the seller wants to pay a purchase price above appraised value. You really don't even need an appraisal if the buyer is paying cash for the house...However, if the buyer is going through a bank (like most) and will take on a mortgage, you will have issues because the bank will only finance an amount based on appraised value of home. Deal is if you get another appraisal, by rule the banks will always take the lower amount. So, a few scenarios will occur - Could be that you hold firm on price and buyer wants it bad enough that they're willing to put more $ down in order to make the numbers work. (Don't know why they would but you never know). Or you will have to drop your price, and they stick with the same down payment, to get numbers down to where they will work for the financing. Or, it could also be a matter of give and take on both sides whereby you come down a bit on price and the buyer puts more $$$ down in order to get to the approved amount borrowed.

There sometimes are additional factors to consider, like repairs needed and factoring them in or out of the deal, but the above mentioned scenarios are generally the way these things go. Hope that helped.

As others have said, that is negotiable and only UP to 3% of sales price on conventional loan. (If 10% down or greater its up to 6% as is FHA). In any case, if fees are less than % asked for seller to contribute, buyer can't get max amount. Things you can do to make you feel better - You can forgo any and all repairs in lieu of you paying a % of buyers closing costs. Or, if it really bothers you, you can always walk and find a stronger buyer.