Profile picture for user8042231

When selling, can you ask a higher price than what the house is appraised for?

  • April 25 2013 - Town of Plattsburgh
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Answers (13)

Best Answer

You have several options to choose from ...

1.) You can hire a qualified professional appraiser to give you an appraisal for your home, rather than accepting the banks appraisal. You can provide your appraisal to any buyer to justify your listing price.

2.) You can ask for a "Comparative Market Analysis" from a Realtor, which will give you an appropriate range to price your property based on sales of similar properties not too far away from yours and not too long ago.

3.) You can ask for whatever price you want for your home, but, a wise realtor may not accept to list it for that price (because it'll just sit on the market forever and eventually the realtor will look unprofessional for listing it at that arbitrarily, unreasonably high price). Also, a buyer may not be able to get a loan for the price you decide to list it for and/or worse, you're probably not even gonna have anyone come to waste their time looking at the property because the price just doesnt make sense.

Remember: Price reasonably/appropriately and with justification.

Best Wishes and Warm Regards from "The Sunshine State!" :).
  • April 27 2013
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Profile picture for ypmmllc
To me, I'm not big on comps unless people are doing a lot of leg work.  Was the house a foreclosure, was it a short sale, was the house on the market for awhile which made the owners lower the price or did the owners already buy a new house and just wanted to get rid of the old house and accepted a low ball offer?  If all that and more is taken into consideration with comps, than great but from what I have seen that is not the whole case.    So the "Comparative Market Analysis" isn't really a true comparative at a detailed level but more on a high overview level.  That isn't really fair or just for the seller.
  • May 27 2014
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Yes..... Appraisals (and Zillow) use historic data, hence in an appreciating market the appraisals will always be LOWER than what they are really worth. Its really now only an issue since the rates of appreciation on the coasts - Florida and California - and probably elsewhere, are above 12% per year, so the difference is more apparent.

Same works in depreciating markets, but in reverse. We appraise homes higher than what they could sell for.

Appraisals by their nature are RETROspective, not Pro-spective, meaning they do not FORECAST the future, nor are they intended to...
  • April 27 2013
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Profile picture for KentDudley

 We are running to this issue in Florida and I feel for the seller on trying to make the right decision.

The last few homes I have sold in Tampa Bay the appraisal came in much lower than the asking price.  All 3 homes the buyers had to come up with the extra cash to make up the difference.

We have about 2675 homes available to buy in the county that I work in and we have 935 homes that are selling per month. A definite sellers market now and the Appraisers data is not keeping up with this hot market.

Check to see how many active listings you have in your area and how many homes have sold in the last 30 days. You might be fortunate enough to get more than appraised value like we did?

I represented the buyer in one transaction and we had the house under ccontract at $205000 and the appraisal came in at $178,000   I approached the seller to meet the Appraised Price and he said no... I came back and ask him to meet us half way?  He said no.. Then we found out that there were 2 offers for cash over $215,000 waiting in the shadows. 

My buyer decided to come up with the extra money and take the house.

Guess it depends on your market??   Best of luck to you

  • April 27 2013
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I just had a seller a couple of months ago that insisted on selling her house at a higher price and had no comps to justify it.  Luckily, we had a buyer that definitley wanted the house and paid cash out of her pocket for the difference.  The lender asked if she really wanted to do that.  The lender was ok as long as they had the money that it was appraised for.   [self promotion and website deleted by Zillow  moderator. Please see our Good Neighbor Policy for posting guidelines]
  • April 27 2013
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Profile picture for wetdawgs
@user8042231:

If you are thinking of an appraisal from last year, then yes, it is possible your house has increased in value.  

While many houses may be on the market for higher prices, it is important to compare to actual sales prices not the asking prices.

good luck
  • April 27 2013
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Profile picture for user8042231
Thank you to all that responses.  They were helpful. A few answers to some of the questions raised.  Just over a year ago we refinanced our house and so it was appraised by the bank.  My husband and I believed that the appraisal amount was a little on the conservative side.  After looking at several houses in the same area that are listed about $50,000 more than our house was appraised at, I believe that our house should be listed for higher than the appraised amount.  In my opinion, the age, updated condition, and additional amenities (large deck, large additional garage, beautiful landscaping)  that my house has to offer, makes it more appealing than the majority of the houses we looked at. Thanks again for the responses.
  • April 27 2013
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You can list for whatever price you want.  the best advice is to list according to the current market otherwise buyers will not be able to understand why you chose the price you did.  Keep in mind, buyers use the same market data to make offers.
Chris
  • April 27 2013
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I have heard of buyers paying over the appraised value for a property, out of pocket.  I would not reccomend it.  Yet the fluctuations of the market and supply and demand factors, may make the buyer more willing to pay more for a home in an up and coming area 
  • April 25 2013
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The buyer's lender will order an appraisal and will only loan the buyer up to the amount of the appraisal.  At that point there are several situations that can happen.  First, the seller can reduce his asking price, OR  Second, the buyer would have to have the money to pay the difference OR, Third, the deal falls apart and the buyer can back out of the purchase.
It is highly unusual for a buyer to pay more the the appraised price!
  • April 25 2013
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Where and when did you get the appraisal? Who did it and for what reason? There are several types of appraisals.

You can ask any amount you like for the house. If a buyer is going to use a mortgage to finance part of the purchase, the lender will order an appraisal on the home after the contract is signed by all parties but before beginning  the final approval process. If the house does not appraise out to the bank's satisfaction, they will not approve the mortgage. 
  • April 25 2013
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Profile picture for SoCal Engr
First, not sure where you got an "appraised value". Have you actually paid for an appraisal? Or, is the value coming from another source?
---------------------------
Assuming you actually have paid for an appraisal.....

Sure, ask whatever you want. Just, don't expect to actually sell it.

Most buyers are going to have to finance, which means there will be an appraisal and the lender will only loan a percentage of the appraised value - leaving the potential buyer to bring extra cash to the table.

From the buyer's perspective, why would they overpay (with the lender and appraiser telling them they are overpaying) and flush money down a hole? This is exactly why any responsible buyer puts an appraisal contingency in their offer - as an "out" in case the appraisal comes in lower than the agreed upon price.

Your only hope would be an "all cash" buyer, who would not need anyone's approval to overpay. But, they're more likely to underbid the fair market value than overbid. After all, that cash came from somewhere...and likely not from overpaying on purchases.
  • April 25 2013
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Profile picture for wetdawgs
You can ask any price you want, but if you ask a price higher than the appraisal price you are likely to not sell.   Very few (if any) buyers are willing to pay more than appraised price.    

(I'm assuming you aren't talking about tax assessor's value).
  • April 25 2013
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