Would you pay over comps?

[Anonymous]

Anonymous wrote:

Anonymous wrote:prices are going up 1-3% a month, go for it with an appraisal contingency, if it doesn't appraise you can adjust the price

What if the seller does not agree to lower the price to the appraised amount? You then either have to buy the house and pay the difference between the sale price or appraised amount in cash or the seller can void the contract which might be worthwhile in a rising market. If you want the house you have to be prepared to pay above the appraised amount.

You forgot the other alternative: not buying the house. The appraisal contingency offers the buyer that out.

[Anonymous]

Anonymous wrote:prices are going up 1-3% a month, go for it with an appraisal contingency, if it doesn't appraise you can adjust the price

12-36% per year? Buy now or be priced out forever! Thank you for taking us back through memory lane, Realtor.

[Anonymous]

Former real estate attorney - I don't think the mortgage company will let you close if appraisal comes in significantly lower than asking price. It's still a buyer's market, why would you pay more than comps?

[Anonymous]

Anonymous wrote:

Anonymous wrote:prices are going up 1-3% a month, go for it with an appraisal contingency, if it doesn't appraise you can adjust the price

What if the seller does not agree to lower the price to the appraised amount? You then either have to buy the house and pay the difference between the sale price or appraised amount in cash or the seller can void the contract which might be worthwhile in a rising market. If you want the house you have to be prepared to pay above the appraised amount.

If you have an appraisal contingency you can walk if the seller doesn't lower the price to the appraisal amount.

[Anonymous]

Appraisal is an art not a science, so be willing to pay what you think it's worth, or even a bit more (not worth it to lose a $500k house over $5k) and get an appraisal/loan contingency.

[Anonymous]

It's still a buyer's market, why would you pay more than comps?

How can you make that judgment when you don't even know where this house is?

[Anonymous]

Anonymous wrote:

Anonymous wrote:prices are going up 1-3% a month, go for it with an appraisal contingency, if it doesn't appraise you can adjust the price

12-36% per year? Buy now or be priced out forever! Thank you for taking us back through memory lane, Realtor.

We just bought for around 800k and 2 months later a 30% smaller comp house appraised and sold for 870k

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:prices are going up 1-3% a month, go for it with an appraisal contingency, if it doesn't appraise you can adjust the price

What if the seller does not agree to lower the price to the appraised amount? You then either have to buy the house and pay the difference between the sale price or appraised amount in cash or the seller can void the contract which might be worthwhile in a rising market. If you want the house you have to be prepared to pay above the appraised amount.

If you have an appraisal contingency you can walk if the seller doesn't lower the price to the appraisal amount.

And this fact gives you leverage, as most sellers dread the thought of having to re-list the house and risk still not getting over appraised value. This happened with our house -- appraisal came in 20k lower than contract price. We split the difference with the seller and everyone was pretty happy.

[Anonymous]

Anonymous wrote:Former real estate attorney - I don't think the mortgage company will let you close if appraisal comes in significantly lower than asking price. It's still a buyer's market, why would you pay more than comps?

The mortgage company will let you close if the appraisal is less than the sales price. The mortgage company will lend an amount based on the appraised amount not the sales price. For example if sales price is $700,000 but the property appraises for $650,000 and the down payment is 20 percent, the lender will lend 80 percent of $650,000 not 80 percent of $700,000. The buyer must then pay the amount that cannot be financed

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:prices are going up 1-3% a month, go for it with an appraisal contingency, if it doesn't appraise you can adjust the price

What if the seller does not agree to lower the price to the appraised amount? You then either have to buy the house and pay the difference between the sale price or appraised amount in cash or the seller can void the contract which might be worthwhile in a rising market. If you want the house you have to be prepared to pay above the appraised amount.

You forgot the other alternative: not buying the house. The appraisal contingency offers the buyer that out.

Yes it does. I was offering the alternative if they wanted the house

[Anonymous]

Maybe at the conforming loan size, say 800k home, but not at super jumbo loan size, say 1.3m home! V volatile pricing and risks at costlier range.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:prices are going up 1-3% a month, go for it with an appraisal contingency, if it doesn't appraise you can adjust the price

12-36% per year? Buy now or be priced out forever! Thank you for taking us back through memory lane, Realtor.

We just bought for around 800k and 2 months later a 30% smaller comp house appraised and sold for 870k

Yup, reminiscent of when we bought in 2003; we bid on three very similar houses over three months, and each time the selling price increased by 5-10%.

We're selling now; our list price will be what a house around the corner sold for in the summer, which was 7% over asking.

[Anonymous]

Anonymous wrote:If you love the house, can afford it, and plan to stay there for a long time (versus it being a short term investment), then why not go for it?

Long term is key. We paid about $10k more than we wanted to for a condo that we were madly in love with, but then had to move for work just 2 years later. If we'd stayed longer, it would have been totally worth it. As it is, it's in the regret pile. (And since we couldn't sell it without taking a huge loss, it's also holding our next downpayment hostage.)