Home Buying in 28226>Question Details

Bubb4644, Home Buyer in Charlotte, NC

Do single family homes sell for more than appraised value?

Asked by Bubb4644, Charlotte, NC Mon Jan 14, 2013

Having hard time believing this statement. Regards a possible cash offer where appraisal has not been done but there is a "threat" to have one. Have the feeling it is quite common.

Help the community by answering this question:


Hi Bubb4644,

In my experience many sell at or below appraised value vs the small % that do sell for more. If you are the seller i would recommend the buyer get an appraisal done for many reasons OR being a seller its also good to get an appraisal and all your home inspections done so you dont have any surprises once you are under contract. Feel free to contact me if you have any other questions. Thanks Ryan 704/608.4767 C/T or Ryanharlan1@gmail.com
0 votes Thank Flag Link Mon Feb 23, 2015

"Do single family homes sell for more than the appraised amount?" Some may but the vast majority sell for an amount below the appraised value. Since lenders will not entertain a loan on a property that appraises below the asking price, it would be fair to assume that those that sell above the appraised amount would be "cash" transactions.

There is a very sound reason why banks insist on a buyer's appraisal....they simply want to know if they are making a sound financial investment in a home that is worth the amount of the contract.

Why a cash buyer wouldn't assume the same posture is beyond me....but all buyers should conduct appraisals to protect themselves.

Hope this is helpful,

0 votes Thank Flag Link Thu Jan 17, 2013
Good morning, Bubb:
I've helped Sellers sell their homes for more than the appraised value when working for the Seller.
I have never helped a Buyer purchase a home where the appraised value was higher than what they paid.

Not all appraisals are equal, and not all appraisers will choose the same comparable properties to establish value.

Here is a good process to follow to establish a property value - especially if the property value is high or the valuation is unusual/complex. If you are the Seller, encourage the Buyer to get an appraisal. If you disagree with an appraised value, you can hire and pay another appraiser (I can recommend someone who will get it right) and try to settle it between you and the Buyer. If you and they cannot agree, you ask your appraisers to recommend a third appraiser who is mutually agreeable to them to review the two appraisals and come up with a final value. You and the Buyer split the fee from this third appraiser. If you appreciate an answer, please give thumbs up. For the most helpful answer, please say thanks with a best answer click.
0 votes Thank Flag Link Thu Jan 17, 2013
Yes, they do often times. Definitely a lot more than they did even three years ago. Kind in mind that an appraisal is just one person's opinion of value and not the end all, be all.

We have in our contract that buyers can back out of the contract for any reason before the Due Diligence period is up. You should address a potential appraisal problem early and before DD is over. You have a lot of leverage with sellers if done by then. Call me and I can explain more.
0 votes Thank Flag Link Mon Jan 14, 2013
They do sell for more than appraised value; however there could be a clause in the contract the buyer can back out if the home does not appraise. Additionally if you are still in the due diligence period the seller can walk losing only their due diligence money. I have had homes not appraise and had buyers walk.
Web Reference: http://www.jonnyagent.com
0 votes Thank Flag Link Mon Jan 14, 2013
It is rare for someone to pay more than the appraised value. Occasionally, however, I have had an appraisal come in lower than what all parties believed the true value to be on the subject property. When that happened the buyer paid cash above the appraised value. The lender will only finance a portion of the appraised value. Most buyers do not have the cash to make up the difference or are unwilling to make up the difference for fear that they are over paying for the property.

If an FHA appraisal is performed on a property it is hard to overcome that set value they have attached to the property for 6-12 months after their appraisal.

If you want to call me and give me the specifics of your situation I can answer your question with a bit more clarity. I hope this helps.

Blessings upon you...
Jan Teel
TEEL Realty
0 votes Thank Flag Link Mon Jan 14, 2013
Typically in this current market I would say no. Appraisals have been very conservative in this current market. If there is a contract on a home and an appraisal is done, the buyer can still buy the home if the appraisal comes in low. The seller and buyer can renotiate the price on the home based on the appraisal. The buyer can still buy the home for more than the appraised value, but I wonder why he would want to do so. In a few years the buyer may have to refinance and should not put himself in the position that the home is not valued as much as he paid for it. He immediately has lost equity.
0 votes Thank Flag Link Mon Jan 14, 2013
No, single family homes do not sell for more than appraised value. I would recommend having an appraisal done regardless of financing.
0 votes Thank Flag Link Mon Jan 14, 2013
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