…a buyer is not overpaying! Appraisals and market value can be a tricky math problem for buyers to figure out, but that’s why my friend Jay Vorhees from JVM Lending has put together this handy-dandy blog to explain. Take a look below:
When Appraised Value Does Not Equal Market Value
We have a buyer who was convinced she was “overpaying” for her property because her appraisal came in low. But, there were multiple offers for her property that were very close in price to hers, and there are nearby pending sales that are also similar in price. The entire issue has to do with appraisal guidelines. We repeat this often in this blog because the issue comes up so often: appraised value often does not equal market value.
If there are multiple buyers willing to pay $850,000 for a property in an open market, then that property’s market value is $850,000. But, appraisers cannot appraise properties (in most cases) above the highest closed comparable sale in the neighborhood. So, if there are no closed sales above $800,000, that property will usually not appraise for over $800,000.
But, again, that does not mean the above property is not “worth” $850,000. Once this was explained to our buyer, she was no longer concerned about her low appraisal. This is something every buyer needs to understand in a fast-appreciating market where contract prices are tough to support in an appraisal.
This is something I deal with constantly with my own clients. Jay hits the nail on the head here: appraisals may come in lower than expected, but it is not equal to a diminishing value on the property. For more helpful information like this, give me a call! I can talk about real estate all day 😉
A past client just put his home at 304 Grapevine Place in Pleasant Hill on the market. It went pending in 7 days and received four offers all over the asking price.
He only bought 15 months ago, but a career with the Coast Guard has him moving to Seattle and he will still walk away with some money in his pocket, although he is telling me Seattle is as pricey as the East Bay if not more so.
I love helping our military sellers and VA buyers. I specialize in knowing about the VA loan, have worked on a military base in Nuremberg, Germany and have a son who is currently in the Navy (on a nuclear sub, NuPoc graduate). If you know somebody who is eligible for the VA benefits and would like to know more about the home buying process, I would be honored to help them.
You can take a tour of their beautiful home here. If you’d like to know what it takes to get your home sold in 7 days or be next on my list of satisfied customers, please give me a call or visit my website at www.kristinlanham.com.
I want to offer my sincerest congratulations to Amanda and Siubhan on their recent closings!
Amanda, a past client of mine, decided she wanted to pursue her dream of having land, horses, chickens and a big garden. When a piece of land became available in Vacaville, she decided to make an offer and it was accepted! We then rushed to get her Concord home ready over the Thanksgiving holiday and were in contract by December 9th. Whew!
Siubhan is another past client who had bought a condo in Antioch four years ago, but had not been living in it for the last year or so and could not rent it out due to rental restrictions. She felt now was the right time to sell. Twelve offers and $26,000 over asking price later, Siubhan is excited to take a trip back to Scotland to visit family.
I would love to know your story and help you accomplish your dreams, reach out to me or visit my website: www.kristinlanham.com.
I was recently asked this question as sellers often have concerns if they list their home slightly lower then recent sales, what would happen if they got a list price offer? I saw a recent article on this subject and thought I’d address this concern in my blog.
In short, the answer is yes, a seller can reject an at or above listing price offer. A listing is a solicitation of offers, not an offer to sell. This means that an offer at or above asking price does not necessarily mean the offer will be accepted.
In order for there to be a contract between buyer and seller, there has to be a “meeting of the minds” on all the elements of the contract. The seller must agree to all elements of the offer including price, financing, contingencies, and time for performance. If the seller has a problem with any of these elements, they have the right to reject the offer
In a sellers market, listings often receive multiple offers, sometimes much higher than asking price. This means that a buyers offer can be rejected because another buyer had a more appealing offer in terms of price, financing or terms like no appraisal contingency.
The bottom line … until the buyer and seller agree to all the terms of the purchase, there is no contract.