Home Buying in 08823>Question Details

Balaji, Home Buyer in Parlin, NJ

Bank appriasal report?

Asked by Balaji, Parlin, NJ Fri Sep 3, 2010

What happens when the bank appraises the property more than my offer?

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Answers

9
-Marc Pollak-’s answer
Wow, that is a great problem to have. My experience with appraisers is that if they come up with a value greater than the contract price the use the contract price for the appraisal. Enjoy your good fortunes as this should make for a much easier closing for you. You may want to see if the bank will allow you to put less money down as you have gotten instant equity and may be able to keep more in your pocket at closing.

I'm curious though. Why wouldn't you want your bank to appraise the property before offering the loan? No bank will offer you a loan and without a contingency that it appraises for at least the contract price. Seems to me it is in your best interest to have the home appraised by the bank offering the loan so that you are in a position of knowledge and not just guessing at the value. As the other agents have said, the seller will not have access to the appraisal as you pay the bank for that service and they can only communicate that information to you.

Hope this was helpful and best of luck as it sounds like your deal is a homerun!!!
0 votes Thank Flag Link Wed Dec 15, 2010
BEST ANSWER
Overappraisal is never a problem with a deal - your seller is not typically given the information of what your bank appraised the property for, so they don't even need to know. If you're seller is in a Short-Sale situation then it's an entirely different matter, as this may cause the bank to re-negotiate your offer (Banks selling short sales do not always follow standard real estate practice). Good Luck to you.
0 votes Thank Flag Link Fri Sep 3, 2010
Nothing :) Enjoy the fact that you got a very good deal on the home! The seller does not have that information as you paid for it through your lender, so that information belongs to you - you do not have to share :) - Lynn
0 votes Thank Flag Link Wed Dec 8, 2010
Hi Balaji,
You've gotten good answers so far - but you also asked, "When i apply for mortgage, dont my bank want to appraise this property before offering me the loan?". That answer is yes, most definitely - but you can get a pre-approval letter and even a conditional commitment from the bank without knowing what property you are buying. Both of these documents will be contingent upon satisfactory appraisal of the property you choose.
Good Luck!
Jennifer
0 votes Thank Flag Link Thu Sep 9, 2010
Balaji,

Over appraisal is a good thing...it's when the house appraises less than the sale price that there is a problem. A bank will not make a loan for $300,000 when the house appraises at $250,000... but conversely if you offered $250,000 and it appraises at $300,000 unless there's a problem with your credit/qualifying for the loan, you are golden.

Be thankful that you are getting a house that worth more on the current market than you are paying for it.
0 votes Thank Flag Link Sat Sep 4, 2010
When you apply for a loan, the appraisal is one of the final steps in the process. Your lender will want to make sure that if they give you a loan for the property that it is worth what you are paying. So, once again, if the appraisal you are referring to is the one from your bank, then there should be no need to worry as this would be good news for you.

Linda
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Fri Sep 3, 2010
When i apply for mortgage, dont my bank want to appraise this property before offering me the loan?
0 votes Thank Flag Link Fri Sep 3, 2010
If your offer was accepted and this appraisal is from your lender...great...

If this is a short sale and the 3rd party lender's appraisal is more than you offered, your offer will likely be rejected or countered.

If your seller paid for an appraisal and has an agreed contingency in the contract, you may find that the seller may want more$$$

But...it sounds like your bank's requested appraisal came in over your agreed price...be happy and good luck with your new home.
0 votes Thank Flag Link Fri Sep 3, 2010
This is great news for you if you are talking about your lender's appraiser. If it is the appraiser of the seller's bank, it could create issues, but I would need more information to give you a thorough answer.

Linda
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Fri Sep 3, 2010
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