Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce  (EXP Realty 414-525-0563)

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Rainmaker
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Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

I'm with Sandy Padula and Norm Padula, JD, GRI - I've seen lots of properties appraise at a contract price that people were concerned about. And I've seen lots of sellers insist on a condition that buyer will buy regardless of appraisal. 

Apr 27, 2016 07:20 AM
Rainmaker
4,869,295
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

then there had better be language in the offer to purchase that reflects the fact that the buyer will pay the difference in cash at closing....

the sellers can pass on that deal and wait for a cash buyer to eliminate that appraisal....

 the seller doesn't have to take that deal.

Apr 27, 2016 06:41 AM
Rainmaker
1,521,521
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Geneva Financial, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

That is a roll of the dice as the appraisal can work against them and the buyer might end up paying more.

Apr 27, 2016 07:08 AM
Rainmaker
516,859
Hella M. Rothwell, Broker/Realtor®
Carmel by the Sea, CA
Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea

Absolutely, and then put in an appraisal contingency. The listing agent better explain what that means to their seller, though, before accepting that offer.

Apr 27, 2016 06:48 AM
Rainmaker
526,059
Mike & Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

Today I learned that my clients over full price offer has a short appraisal. Multiple offers, great house, great neighborhood.  

I expected that, as did the listing agent, buyer and seller.  At time of contract, buyer and seller agreed to split an appraisal shortage if needed.  The buyer would pay 1/2 of shortage in cash, seller would reduce the price by the other half.

The appraisal came in for less than expected, but I think buyer and seller will work it out,  

This was not a game just to win, or play games.  It was a creative effort to get a house for the buyers that they loved. 

Eve

Apr 27, 2016 07:50 AM
Rainmaker
4,796,501
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

They may try.  Though, that's playing a form of Russian Roulette.

Apr 27, 2016 06:38 AM
Rainer
302,029
Melissa Jackson
Citiwide Alliance Realty - Weatherford, TX
Helping You Make The Right Move

Yes, I'm sure there are agents that do this.  I have also seen an instance in which the seller said, You determined the value when you placed your offer." "Pay the difference"  That agent actually got the home sold for higher than appraisal. Not all buyers have the extra $$ to make this work.

Apr 27, 2016 06:19 AM
Rainmaker
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Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Some might but in our market, there are many offers that are submitted without a loan or appraisal contingency.  If a property has an appraisal issue any difference will need to be made up by the buyer(with the necessary proof that this can be done accompanying the offer).  This is especially true when there are multiple offers and financed offers competing against all cash/quick-closing offers.

Apr 28, 2016 12:17 AM
Rainmaker
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Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Huh, sounds like you ran up against this?

Could be a double edged sword though -if it does the buyer must pay the higher price LOL

Apr 27, 2016 08:49 PM
Ambassador
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Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Here the crazy prices seem to be appraising!  So that's not always the best strategy!

Apr 27, 2016 03:28 PM
Ambassador
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

it's the rarest of occassions that offers are written for over list in my market and I can't remember the last time an appraisal didn't come in at value here. I think it was dec. 2014

Apr 27, 2016 02:49 PM
Rainmaker
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Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Yes, I certainly do...but we know how to resolve that little ploy, don't we Sally K. & David L. Hanson 

Apr 27, 2016 01:12 PM
Rainmaker
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Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

I have not heard of that stradegy but then again I just don't think that way myself Sally K. & David L. Hanson 

Apr 27, 2016 10:33 AM
Rainmaker
984,194
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Often the buyer need find another lender and pad the difference. In our area homes are still sold way way over listed price.

Apr 27, 2016 09:53 AM
Ambassador
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John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

I don't believe it - I KNOW it to be true as a fact.  I've heard many buyers agents say "Don't worry, there's an appraisal contingency to protect you..."

 

Just as bad as listing agents presenting way below market to incite a bidding war.  

 

I wish people would just price at a fair market value and let nature take it's course...too many games in this industry and it leaves consumers with a bad taste in their mouth.

Apr 27, 2016 09:47 AM
Ambassador
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Amanda Christiansen
Christiansen Group Realty (260)704-0843 - Fort Wayne, IN
Christiansen Group Realty

I've used this strategy as a buyer's agent in this market.  It's sometimes the only way to get a home under contract for a buyer today.  So far things have worked out.  I do explain to my buyers that if they're buying a home today, they aren't in the driver's seat.  

Apr 27, 2016 09:10 AM
Rainmaker
982,624
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

It isn't a tactic of preferred use but certainly it continues to be used. I believe!

Apr 27, 2016 08:52 AM
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

I agree there is some double talking going around and you have t be really careful especially if you are representing the seller. Those kickout clauses take you back to square one.

Apr 27, 2016 08:48 AM
Rainmaker
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Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

I have seen that tactic used before. It's a good way to get offer rejected.

Apr 27, 2016 08:01 AM
Rainmaker
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Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker

It's not really a lot different than listing agents underpricing a home to drive multiple offers over asking. The house is worth what the house is worth and how buyers/sellers handle an appraisal contingency varies from place to place (and even neighborhood to neighborhood, depending on your market). 

Apr 27, 2016 07:52 AM
Ambassador
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Fred Griffin presently on Leave of Absence
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Interesting gamble.  I hope they are prepared to eat the overage if the appraisal comes in.

Apr 27, 2016 07:35 AM
Rainmaker
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Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Yes . . . but in a changing market, that's riskier than 00 on the roulette wheel.

Apr 27, 2016 07:21 AM
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Sounds like a risky strategy, but quite possible.

I do prefer a cash offer...

Apr 27, 2016 07:19 AM
Rainer
39,469
susan paige
West Coast Florida Real Estate Group - Spring Hill, FL
Pet Friendly

Here offers are multiple and yes offers are sent for over the asking price, but the seller does have to know it might look good, but as said before the appraisal has to come in within the parameters for funding.

Apr 27, 2016 06:59 AM
Rainmaker
1,157,264
FN LN
Toronto, ON

Buyer agents often write offers over asking price in multiple offer situations which are common in my area in today's market.

Apr 27, 2016 06:29 AM
Rainer
149,606
Michael Thacker - Re/Max Real Estate Center - Louisville
Re/Max Real Estate Center - The Thacker Group - Louisville, KY
Your best friend who just happens to be a Realtor

Here you have to write for over asking on many homes, or you are not in the running. 

Apr 27, 2016 06:22 AM
Rainmaker
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Teri Pacitto
Compass - Westlake Village, CA
Real Estate, Your Style...Your Home...My Specialty

I truly hope no one would do that and fortunately have not had that happen. If it did happen I would also blame the lisitng agent as it is the duty of the LA to price the home to sell as well as appraise.  I have seen situations where buyers thought they paid too much and try to get price reduced after the inspection thinking they paid too much...but that is another topic. 

Apr 27, 2016 06:20 AM
Rainmaker
4,020,276
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

The appraisers around Denver are trying to keep up with values.  Even if a buyer writes way over, usually they offer $xxxx over appraised value.  At least the seller knows they got the highest and best price for their home.

Apr 30, 2016 07:27 AM
Rainmaker
5,263,830
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Home sellers and their agents need to be selective.

Apr 28, 2016 09:42 AM
Rainmaker
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Tony Lewis
RE/MAX of Valencia (Hall of Fame) 30 year Valencia Resident - Valencia, CA
RE/MAX Valencia, Stevenson Ranch, Santa Clarita

We all have written offer above market value.  Sometimes the buyer comes up with more money other times the seller lowers the price.  There are also times that the escrow cancels.  We do the best we can to get our clients their home.

Apr 28, 2016 08:23 AM
Rainmaker
1,210,969
Ryan Huggins - Thousand Oaks, CA
www.HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

YES!!  Going high over asking is a frequent tactic.  Offer high and negotiate it down with appraisals and repair or credit requests.  When that happens I put "seller will not lower price if house does not appraise.  Buyer to make up difference between appraised value and purchase price" into a counter offer.  It lets them know I'm on to them and "Ryan don't play that!"

Apr 28, 2016 03:45 AM
Rainer
98,188
Becca Rasmussen
HomeSmart Cherry Creek - Highlands Ranch, CO

I believe people do try that, yes!

Whether or not they are successful in actually talking the seller down afterwards, who knows. In this Denver-area market, the seller might just move on to another offer from a buyer willing to overpay. 

Apr 28, 2016 01:14 AM
Rainmaker
1,366,827
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Sally K. & David L. Hanson I think this is a very unprofessional tactic. I would advise my sellers to counter the offer expressing the buyer to pay the difference, if the property does not appraise.

Apr 27, 2016 11:43 PM
Rainmaker
2,941,866
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

YES i am seeing a pattern especialy from a firm in my area and then they also use the inspection to beat down the price. 

Apr 27, 2016 11:24 PM
Rainer
223,565
Ron Climer
Keller Williams Realty Mountain Partners - Tryon, NC

If the seller took the financial contingency out of the contract, that would solve that problem.  With FHA and VA , you have to have financial contingencies.  You do not with conventional financing.  You question was do we believe it.  Yes I believe it.

Apr 27, 2016 10:24 PM
Rainmaker
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Tony and Suzanne Marriott, Associate Brokers
BVO Luxury Group @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

It would not surprise me...

Apr 27, 2016 10:04 PM
Rainmaker
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Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I have not had that happen.

Apr 27, 2016 09:36 PM
Rainmaker
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Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Sally. I have actually heard agents make that statement, pretty poor thinking.

Apr 27, 2016 07:29 PM
Rainmaker
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Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

Maybe, but it is a risky game and I would not do it, since sellers probably have few back ups and I just wasted everyone time with with strategy. 

Apr 27, 2016 05:23 PM
Ambassador
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Sally, listing agents are smart - they want the appraisal contingency waived....

Apr 27, 2016 04:08 PM
Ambassador
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

I echo what Nina Hollander says. If they want the house, and there is competition, they may have to pony up

Apr 27, 2016 03:55 PM
Rainmaker
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Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

I think that is a pretty risky practice if that is what they are doing.

Apr 27, 2016 02:08 PM
Rainmaker
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William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I believe there are agents out there that will do un-ethical stuff to their benefit

Apr 27, 2016 12:57 PM
Rainmaker
3,065,917
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

With our fast market, I know some agents are playing that card.

Apr 27, 2016 09:49 AM
Rainmaker
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Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

Of course!

It is the listing agents job to anticipate such action and get the bank out of the negotiations first.

Apr 27, 2016 06:33 AM