Shannon Slater, Residential Appraisals -North Texas (DW Slater Company)

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Rainmaker
743,532
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

Many buyers enter into a purchase agreement (in Florida) fully anticipating to deliver a price beat down for inspectation issues and further based on the appraisal.  The voice in their head said, "Don't worry, the bank will NEVER approve this price!" 

Seller always say they sold to low and buyer believe they paid too much.

So, nothing has changed.

Jun 17, 2015 11:42 PM
Rainmaker
911,112
Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

I think that is a reflection on the expectations their agent set up. In multiple offers where they "over pay" for a house to win the bid, they can have the expectation that the appraisal will help them lower the price back down. Two problems: 1. the seller may stick to the price and go to the next offer if you attempt this (they have the leverage of other offers willing to step up). 2. that agent created an uncommitted buyer (buyers remorse) under that premise if that's their underlying hope and only reason they did it.

I always share an appraisal as validation for what they paid, proof of equity if it's higher and if lower within reason, not a shock because if I've executed my comps correctly; they knowingly bid over with the intent to cover if the seller won't budge. My buyers know roughly how much cash out of pocket I'm exposing them to up front with the offers we write in our sellers' markets.

Jun 17, 2015 11:43 PM
Rainmaker
526,059
Mike & Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

I have never had that problem, but I manage the buyers expectations and don't show them homes they cannot afford.

Eve

Jun 18, 2015 12:24 AM
Rainmaker
982,854
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

This will be my first bookmarked Q &A Shannon. Investor Buyers need to see this too, when a property is purchased subject to the appraisal the result will be perceived value / perceived price all day long  

Jun 18, 2015 12:14 AM
Rainmaker
291,467
Jack Lewitz
IL Real Estate Specialists - Evanston, IL

I think buyers and sellers enter contracts on a price they think the property is mutually agreed upon and then it's up to the appraiser to ratify that price is right based on their expertise . The problem comes when appraiser are not familiar with area and in the past the appraiser were coming in at 90-80% if value which just so coincided with buyers down payment and the loan amount to be borrowed. 

Jun 17, 2015 11:57 PM
Rainmaker
5,264,356
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Appraisers should certainly be able to assume that the home sellers and the home buyers agree on the price when there is a ratified contract. 

On the other hand, many buyers are hoping for a price reduction.

Jun 17, 2015 11:33 PM
Rainmaker
2,895,802
Richard Weeks
Dallas, TX
REALTOR®, Broker

Good question and some good answers posted here.  

Jun 18, 2015 10:00 PM
Ambassador
4,298,246
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Shannon Slater you are right!

There was a post here that mentioned that offer $50K higher, win the multiple bids and hope the appraisal takes care of 'RIGHT PRICE'!

Good idea? I don't think so!

Jun 18, 2015 06:59 AM
Ambassador
1,611,744
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

A legal contract should be honored by both parties and there is the ability to sue for specific performance. We do negotiate repiars often, and if the home doesn't appraise that can also be an issue, but in my 26 years I have never had someone try to game the system.

Jun 18, 2015 06:48 AM
Ambassador
3,043,119
Paul S. Henderson, REALTOR®, CRS
RE/MAX Northwest. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

I have had  buyers that use the appraisal as a fall back position. The ones I have a problem with are the ones that get into a bidding war for a property and it won't appraise for value. They then try to back out but I cover my butt by having them sign a addendum that says that they understand they are responsible for the over listing price balance...

Jun 18, 2015 05:09 AM
Rainmaker
4,796,551
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I don't see that happening in my area.  There may be some buyers getting some poor advice from someone, but they should be ready to pay the contract price.

Jun 18, 2015 04:51 AM
Rainmaker
315,431
Robert Smith
Preview Properties, PC - http://www.RealEstateMich.com - Brighton, MI
SRES, Search for Homes Brighton-Howell-SE Michigan

Ha, remember the 'good old days' when buyers were only mad if it appraised for more than the contract price?  I prepare my buyers and do a lot of comps to get them to write at an appropriate price.  I suppose some folks are just born hagglers and gamers, though.

Jun 18, 2015 03:02 AM
Rainmaker
698,797
Chris and Dick Dovorany
Homes for Sale in Naples, Bonita Springs and Estero, Florida - Naples, FL
Broker/Associate at Premiere Plus Realty

A contract, here, is a completely executed contract unless their is a congingency.  Too bad if the appraisal came in at sales price. 

Jun 18, 2015 02:19 AM
Rainmaker
1,521,521
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Geneva Financial, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

You find all sorts in this business. Perhaps the buyers agent told them they were coming into an equity ownership at closing?

Jun 18, 2015 12:25 AM
Rainmaker
1,675,306
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

When they write the contract, it is determined what their buying power is.

Jun 18, 2015 10:47 AM
Rainer
39,282
Shannon Slater
DW Slater Company - Pilot Point, TX
Residential Appraisals -North Texas

Thanks everyone for your input! Maybe this was just two rare occurances and I have not seen it before in our market but I thought I would ask.   It's good to get input from agents.  

Jun 18, 2015 06:54 AM