Is it prudent to offer more than what you think the house is worth because seller believes in that price (50k over) and then include a clause that seller must match appraisal. I am worried of potential collusion between real estate agents and appraisers to appraise at sale price. Dom 60 days
Posted by Solid_Star7550
4 Comments
Why not find another option? There are always other houses on the market
No, offer what you think the house is worth. Lots of sellers can be delusional about price at first, but the ones who are self-aware enough to realize they’re being delusional don’t let their houses sit for 60 days. This seller is unlikely to be convinced to drop the price even if appraisal comes in below. They will probably just refuse to move and let you walk. Meanwhile, you’ve paid for an inspection and appraisal for no reason.
Offer what you think it’s worth. If the seller says no, wait another month and do it again. Repeat until the seller gets fed up and takes it off the market or gives in and agrees (or you find a different house with a reasonable seller).
Take this with a grain of salt because it’s based on hearsay, but I’ve read that out of everybody who is involved in the process, appraisers are the most objective. Their license is on the line and they could be held criminally liable for any kind of collusion.
All purchase agreements have a finance contingency, which means that the house must appraise at or above the contract price. If the property doesn’t appraise then the buyer can negotiate a lower price with the seller or cancel and get their earnest money back.
Appraisers are hired by lenders, but lenders don’t decide which appraiser is assigned to a particular job. Lenders submit appraisal jobs to a pool and appraisers are randomly assigned to jobs. Appraisers are paid a fixed fee from the company they work with so they don’t have an incentive to collude with a real estate agent.
A buyer’s agent doesn’t have any contact with appraisers.
Listing agents represent the seller but other than meeting the appraiser to let them in the house, they can’t influence the appraiser one way or another.
Appraisals are very straightforward. They’re just math and a little judgment to evaluate condition. If a buyer doesn’t agree with appraised value, they can ask for a reconsideration of value.