People are crazy when it come to their homes. I had an offer in on a 970 sqft studio on 10 acres earlier this year that the owner was insisting was worth 750K. She was wildly insulted when I showed her comparison houses and property that were being offered for 400K and I offered 450K after it had been on the market for 7 months. It’s still on the market 3 months later.
Good luck wait it out, the owners will come around or you’ll find a better place.
Appraisers are NOT professionals, in most cases.
I have known several, and they were minimum wage slaves until they learned that county records were free. They then walk through a house, compare it to recent home sales in the neighborhood, and pull a price out of their ass.
I have had several well respected appraisal companies attempt to hire me based on my work in gov’t and county records, etc…
There is a wild variation in what you will get from an appraiser, and they are very open to suggestion.
OP, I can definitely feel your pain. My parents are trying (emphasis on trying) to buy a home and every time it seems as though “this one is it!” something happens out of their control. I’m involved in the process quite a bit so it’s shocking to me that people…can be so stupid.
Example 1: Home is listed for X+Y dollars. Homes in area have sold for X dollars. Parents make a bid for 8% lower than X dollars, assuming they’ll settle at X dollars. Owner counteroffers X+Y dollars - 1% :smack::smack::smack:. Owner is not rational; she was a secretary who married a dying rich guy and inherited lots of $. How can you deal with an irrational person?
Example 2: Homeowner accept bid and then doesn’t want to move for 2 months. Homeowners are empty nesters with grown children, NOT children in school or even in college. WTF? House has been on the market for a year. They will. not. budge on the moveout date.
Example 3: Builder owes contractors $, won’t release new homeowner from liability of contractors going after new owner.
Your house is out there, that just wasn’t it…
ETA: Hope the lunch viewing of the new house with potential works out!
We had that happen, but we were the sellers. It ended up that the appraiser had just moved to our small town from the big city of Indianapolis and couldn’t believe anything in West Lafayette was worth any money, so he appraised way low. Our lawyer arranged for another appraiser to look it over and we had no problems.
Agreed. If the houses are similar, you can make your wow factor yourself, on your own schedule, with your own budget.
If appraisers are like house inspectors, they definitely aren’t all equally professional. When we were selling our house two years ago, the first people who offered on it brought in their own “inspector,” who we suspect was a relative of the buyers. He did what was basically a fraudulent inspection - lying about the condition of the house to force us to reduce our price. We wised up and got our own inspection done with a qualified inspector, and found that none of the original inspection was true (which is what we thought all along - the fraudulent inspector was saying things like the foundation was cracked and the shingles needed replacing). We’ll do that in the future - it’s worth it to pay the couple of hundred dollars it cost to not have someone trying to scam you with a fake home inspector.
If appraisals have become something that you have to have done to buy a house, you need to know what houses are worth and what they’re selling for in the area that you’re trying to buy in to protect yourself.
I thought banks got their pee pees slapped over financing houses worth less than appraised. Isn’t it illegal now?
Isn’t that what caused the housing boom to bust?
Possible, but unusual. The normal story is that the agent wants to list the house at something below its market value - that generates a quick sale and a quick commission requiring minimal time & effort.
Sometimes it takes the real estate agent and sellers a while to come to grips with what their house is actually worth. The market has taken big hits, and is still going down almost everywhere. Unless the appraiser was making invalid comparisons, you just need to wait out the sellers. They’ll either decide they want out of the house and will lower their price, or that they’d rather not sell in this market.
The house I’m sitting in right now, we made an offer on, and the seller’s agent didn’t even bother to respond with a counter offer, because we were too low. Two months later we were closing at our offer price. This represented a price drop of about 20% from the seller’s original asking price. Zillow, our real estate agent, us and the appraiser all agreed on what the house is worth. It was only the seller and her agent who had to come to terms with its current value.
Do like us, keep looking, but be sure and check back with the house you like. After our offer was ignored, the selling agent said the house was getting good traffic, but we viewed it again two weeks later, and it was clear nobody else had been inside since the last time we’d been there. We didn’t call the selling agent’s bluff, so much as let her come around on her own, and bring the seller with her.
I forgot to mention, we weren’t aggressive or condescending to the seller or her agent (though we did a lot of WTF? in private). We just kept telling her that our offer was as much as we could afford, that it was a beautiful house, and we wished them luck.
In your position, maybe keep telling the sellers that the appraisal + $10k, or whatever is as much as you can afford, because that’s as much as any bank’s going to loan for the house. This lets them save face, in that it’s not them who think the house is worth too much, but that they’ve begrudgingly accepted the offer available to them.
This, with a cherry on top!
That said, Glory, man, oh man, I totally feel your pain. Mr. Ko and I have made numerous offers, have been undercut by investors, put off by banks on short sales, [probably] lied to about competing offers on bank owned homes and have toured more dumps than you can shake a crummy counter offer at. We are both mightily weary of the whole process, but still, I’d have to say that for each failed transaction, as sucky as each one was, we really did wind up dodging a substantial financial bullet. It’s a crazy market and it’s still declining, so we continue to rent and look and look and look. I dunno, Glory, your circumstances may be different than ours, but speaking for myself, I’d rather stay on the merry-go-round a while longer than pay 40K more than any house is worth.
It’s possible the sellers cannot afford to lower the price.
The people I bought my house from were in debt up to the asking price – actually beyond, as it turned out. They had taken out a second mortgage and made very expensive modifications to the house, which they’d put on their credit cards! After they moved to another state, they stopped making payments on the house for over a year. They knew they had to cover the missed payments, but didn’t realize – until closing day! – that they also had to pay substantial penalties. Rather than lose money, they were willing to walk away from the deal and let the bank foreclose on the house. I wound up paying several thousand dollars above the agreed upon price to get the house.
Later, I heard they’d gone bankrupt.
I’ve lived here for 10 years and right now, due to the economy, the house is appraised at less than I still owe.
Quick update:
We did check out the other house, but the same day, the sellers accepted our lower offer (appraisal +10K). I’m very excited, we are getting a great house with a lot of fabulous upgrades for a really good price.
Yay! I love happy endings.
Yay indeed!
But you offered “within 5K of the asking price and they accepted”… and then you changed your mind, is that right? Why would you make an offer without having a clear idea of what you thought it was worth?
Right. The real estate industry has a long way to go to adjust to the new norms, which are still in motion anyway. The relationship between appraisals and practical value at this point is pretty theoretical.
So it looks like the appraiser saved you $30k. Congratulations!
omg yaaaay! congrats!
Okay, I’m not a Realtor, but our contract clearly stated that the house has to appraise for the sale price or we wouldn’t have to through with the deal (this is standard). The house did NOT appraise so we renegotiated the selling price. Both us as buyers and the sellers acted correctly and in good faith.