Hey, sorry if this is a dumb question.
Do I have any hope of negotiating a significantly lower home price if the house I have my eye on has an appraisal value of 100k, but is currently listed over 300k? I'm trying to avoid identifiable details…but it's an old home in good repair in the better part of a low-cost low-demand area. It was originally listed over 400k many months ago.
I was under the impression that you can't even get a home loan for a house with such a huge appraisal gap.
What am I missing here? Is it just a dilusional seller with an equally dilusional realtor? Uninformed appraiser? What are the chances I can get the house for closer to the appraisal value?
Home listed for 3x the appraisal?
byu/Knittin_hats inRealEstate
Posted by Knittin_hats
13 Comments
That’s a massive red flag dude. Either the appraisal is ancient/garbage or the seller is completely delusional. You’re right that most lenders won’t touch anything with that kind of gap – you’d basically need to come up with like 200k cash to make up the difference
My guess is they’re either fishing for some sucker with all cash or they have zero clue what their house is actually worth. I’d lowball them hard just to see what happens but don’t get your hopes up
Are you by chance referring to the assessed value? This is a very different thing than the appraised value
How do you know the appraised value?
So you already made an offer, and you’re at the appraisal part of the process? If not, how did you get the appraisal?
This sounds like a tax assessment value, VERY different from the appraised value. Many localities don’t tax the full current value of a home, or have tax credits for various reasons that could make a tax assessment lower. This doesn’t affect the appraisal one bit. If your tax assessment is only 100k for a $300k property, that is great news (but it may not stay $100k after you buy it!)
Seems rather low for any house to be worth $100k these days. Generally when you are that far off it’s probably a delusional seller. Many realtors will take the listing and hope the seller lowers it eventually. If they really want to sell it they will lower the price but with a seller like that it might take years if they are in no hurry. They may also pull it off the market and just rent it.
Beyond that I would ask if there’s really that many $100k comps for sale in the neighborhood why not just buy one of those? Why screw around with a seller who is delusional?
What are comps? Is it on a corner where is could be turned into commercial? Is it a double lot that’s buildable?
Could be lots of reasons but a seller can list for any price they want.
The county tax assessor is not qualified or competent at residential real estate appraising, regardless of what title they erroneously put on a publicly visible property tax bill. Even if that person is by pure coincidence a qualified appraiser, they aren’t applying industry standard norms, they are following some legal fiction of a formula.
How would you know the “appraised” value, did you pay for an appraisal? As others have said, are you looking at “assessed” value from a tax perspective? If so, you are not getting the house for that. It is not an appraisal and if it is a homestead, they probably have not had to pay giant increases in property tax. In some places you are taxed on half the assessed value or get a $100K discount for homestead, just depends on the state.
What is the home worth?
The tax assessment is not the same as the appraised value. What are similar homes in the neighborhood being listed for, and what are they selling for?
I don’t think your words mean what you think they mean.
How do you know what the appraised value is?