Thread: Appraisal question

Originally Posted by sell1

We are selling our home have a question; we had an appraisal done and feel we can get more than it appraised for based on the location and a lack of available homes in our area.

However, we have already purchased a home and though we can afford it we do not want to own two places for long.


Therefore, are there any standard guidelines to go by on pricing a house based on the appraisal value? Is there a percentage of markup over the appraised value that is acceptable without causing to much of an issue?

Thanks

It is extremely hard to get more than what a home apprasies for because most buyers finance their purchase and banks will not loan based on a value greater than the appraisials. Another thing you should note is that appraisials that are done for the bank are usually more stringent than are those done for individuals. This means that an appraisal done for the bank will most likely be less than the one you have recieved. If you are truely concerned about owning two homes dont list your home for more than 5% above the appraised value. Good luck and any more questions you have are more than welcome.

What circumstances allow for the sale price to be more than the appraisal value? The appraisal I had done had two of the three comparable properties selling at a higher value than they appraised at by 2-5 percent. FYI, the appraiser we used is at the top of the list of "approved appraisers" by the bank in our small town.

Originally Posted by sell1

What circumstances allow for the sale price to be more than the appraisal value? The appraisal I had done had two of the three comparable properties selling at a higher value than they appraised at by 2-5 percent. FYI, the appraiser we used is at the top of the list of "approved appraisers" by the bank in our small town.

The circumstances are one of two related scenarios. First that you have a cash buyer and a appraisial by the buyer is never completed. Second still has to do with the amount of cash the buyer has on hand. The buyer would have to put a greater than 20% downpayment. This is because the bank would require its normal down payment on what the appraisial value is and then any additional the home sells for above the appraised value.

The toughest part of this situation is that most buyers want an appraisial and are not willing to pay more than the appraisial comes back at. Therefore the pool of potential buyers that have the ability and the willingness to pay more than the appraised value are few and far between in a normal market. In the market we have today buyers are looking for a bargain and a home with a sales price above the appraised value is just not a bargain. Good luck with your home sale.

Depending on the market your in its usually hard to get more then it appraises for. Especially if you have another home and talking about two payments why would you even try to over shoot the market???

Originally Posted by kevin huntley

Depending on the market your in its usually hard to get more then it appraises for. Especially if you have another home and talking about two payments why would you even try to over shoot the market???

We do not have two payments. The house we are looking to sell is paid for. A realtor friend looked at our house & said we could get $290,000 based on the market in our area. We had an appraisal done and the house was valued at $278,000. The friend is on vacation, so I can't get his opinion now. When I see two of the three house compared on the appraisal go for more than the appraised value I wonder why can't I do the same? However I don't want to be out of line either.

you can ask the appraiser to reconsider their appraisal, and/or get a second appraisal done with comps provided by the realtor who said it could sell for 290k. you might ask the realtor to contact the appraiser. in any case, this would probably be easier than trying to get 290k with your current appraisal as-is.

Well, when a home is appraised, it is basically it. If you want to get more out of it, you should make significant additions to it. But if not, it will be a lot hard to get more out of the appraised price. I think you have to consult an expert regarding this but more or less the appraised price will still be the one that will be followed here.

I know for sure that this is a seller's market now and appraisers use comparable market sales of properties in your area that were sold within the last six months in order to appraise your home. Most often, the case is that the appraisal given to you keeps changing every few months. So you can definitely mark up your price a few thousand at every point in time.

Depending on where you live, housing costs can go up exponentially, and the bank that the potential buyer is using might be using old information. A tip is to make sure that the appraiser takes into consideration any upgrades that you have done for your home.

I will have to get back to you regarding the maximum percentage that you can go over the appraised value of your home (though I doubt that there is one).

you can sell your home for whatever someone is willing to pay for it, regardless of the appraised value. If someone is willing to pay $350,000 for the home then you can sell it for that. If someone is only willing to pay you $250,000 then you can sell it for that amount. Yes, if there haven't been home sales to back up the value you can run into issues with the lending if someone is financing the property. If you do run into problems they can either pay the difference in the purchase price and what the lender is willing to finance or you can renegotiate the price.


There isn't just a standard mark up over the appraised value...