I would say to the seller "Wow! You must have had a lot of offers on the property!" In this market, sellers cannot afford to play hardball. Besides, if you had a CMA done beforehand, you should have a good idea what the property appraises for and so should the seller.

The only caveat is that the market in some areas is changing FAST... Another thing to keep in mind, is that an appraisal doesn't usually follow closely the housing market, but rather is an opinion of value. There's a difference! Right now, most appraisals are coming back MUCH higher than market value and the seller probably knows that but could use it to their defense.

Here's the bottom line: If you made a reasonable offer, they should be willing to do what it takes to make you happy (within reason). If you got a killer deal, then maybe they shouldn't fix anything! These days sellers are getting slaughtered, so try to have a heart and not finish them off.

J
Some very helpful posts here. I am puzzled that you do not mention what your Realtor recommended. If that means you are working without professional representation think about this. If on such a basic issue as negotiating, what ELSE might you overlook?

Your question is confusing , and I think that the other posters have tried to help you. If you had a professional helping you I think that they would explain the process:
You make an offer, you negotiate a price, you agree on a sale price SUBJECT TO:
Inspection
Title Report
Termite inspection
Appraisal
PLUS - you qualify for a loan and the lender will give you a loan
(There may be other factors in your area not listed here).

It is common after an inspection takes place to share the report with the seller IF you are going to ask for repairs or allowances (which you might be referring to as "concessions").

If there are items that the inspection reveals are issues, then you and the owner negotiate to a point where you are both happy. In some cases it is easiest for the seller to give you an allowance so you can have the work done to your satisfaction (picking out a carpet color for example). Sometimes repairs are REQUIRED by the lender (such as replacing a roof in a rainy climate).

The appraisal is something that YOU pay for normally. Therefore, only IF the appraisal comes in low should it be an issue. You may be unaware, but as of May the appraisal procedures have changed and we are having LOTS of appraisal issues, primarily LOW appraisals, so transactions are falling apart.

IF the appraisal is less than the agreed sale price then YOU, the buyer, need to make up the difference in CASH, OR the seller needs to adjust their price.

In most transactions the inspection will be completed first. The appraisal may take longer. So negotiate from the inspection first, THEN worry about the appraisal.

The other key factors, which your Realtor should be able to learn, include:
How long the property has been on the market
Does the seller have a hard move date? Starting a new job?
Does the seller HAVE TO SELL?
WHY IS THE OWNER SELLING?

All of these factors come into play when you are negotiating. The more information you have about the seller's situation, the better you know the limits.

Good luck.

Time to play hardball. Your agent needs to do an amendment to address concerns. Ask for the repairs you want. Give him time limit to respond - WITHIN your due diligence period. If no response, or not the answer you like, terminate the agreement. If you want, send another offer with the termination that covers what you need in repairs and see if they want to try again.

The appraisal is not of the Seller's business - tell him so. Don't get too emotionally tied to this house. Unless it's a really unique home, there are 100 more out there just as good or better.

One more thing. If you don't have an agent - get one. Issues like this is where a good agent earns their keep.
Finding you ah ouse is the easy part. Making the deal work is the real work.

A real estate purchase is really a simple process - done properly that is.

You make an offer at a certain price - the seller, accepts, rejects or counters your offer.
If you reach agreement, then you have a price and a contract - then the loan process/appraisal happens.
Unless you are paying cash, the lender orders the appraisal and you have no obligation to share it with the seller.

The appraisal - especially under current market conditions - is primarily to justify the bank loaning you money to purchase the house. It doesn't reflect what you can sell it for tomorrow or anything other than that.

Similarly, an inspection is done to assess the condition of the home - you make an "offer" on what repairs are deal breakers for you and you and the seller agree or don't agree at which point you can decide to continue the purchase or to terminate it - assuming you are within your due diligence period.

Additionally, you use the word concessions, which implies money changing hands (which is generally illegal), a reduction of purchase price or increase in closing costs paid by the seller. If you are truly having concerns about repairs/condition of the property you should use this to address legitimate concerns (in writing) that would keep you from being comfortable from going through with the purchase.

I have to agree with Lee T, Hank and Jen - address all issues in writing and there is a clear cut path that seems to be working for those of us selling homes on a regular basis.

Good luck to you!

Are you dealing directly with the homeowner? This is a great example of one of the reasons you shouldn't be.

What concessions are you looking for?

What is a "good" appraisal? I assume that means it appraises for a lot more than you're paying.

What if it's a "bad" appraisal? What happens then?

Maybe you should make a deal with the owner:
If it's a "good" appraisal, the seller doesn't have to give you any concessions.
If it's a "bad" appraisal, the seller has to lower the price you pay.

Or you just take into account any concession you may want to ask for when you make your offer and neither of you have a need to get into what the appraisal is and how much you want.

Huh?

Can you choose either a good appraisal or bad appraisal? A good strategy might be to tell them it was a bad appraisal but really ask for a good appraisal. If they ask to see the appraisal then that might be difficult unless you change the topic to the inspection or to how the Braves are doing, maybe try to mix the seller up and even play coy, "appraisal? what appraisal?'...make him wonder about things....kinda like this question.

Here's an idea - turn your phone off and let your crack agent who should be walking you through this do his/her job. I smell dopey agent here.....at least I think that's what that smell is.

Act like you've been here before, man.

Do not communicate verbally with this seller- I know that is exactly what you've been doing, or if you have a stupid agent then that is what your stupid agent has been doing.

Refer to your contract, notify in writing as required and remember that he who says the least wins the most.

Did the appraisal come in high or low?

Certainly unusual. The biggest concern is will your due diligence period lapse before you get the results of the appraisal. Once your due diligence period is over, you're buying it as-is. I'm assuming that if the seller is making this demand, you must have asked for a significant amount of work to be done.

What the home appraises for should have no relevance on what concessions the seller will make. It's the buyer's responsibility to get the appraisal, ordered by the lender. The buyer doesn't have to share the appraisal with the seller and usually doesn't.

Jen Bowman, Broker Associate
Success Realty
404-456-5024

Has the Appraisal been done already?

Who ordered the Appraisal, you or your Lender?

Has the Inspection been completed?

Who ordered the Inspection, you or the Seller?

Is there a Real Estate Broker involved, or are you buying For Sale by Owner?


Thanks,
Fred
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