Home Buying in Benicia>Question Details

Market Value…, Home Buyer in Vallejo, CA

Is it common for a home to appraise $100K or more lower than listing price? Also is it common for a home to sell that far over appraisal.

Asked by Market Value Buyer, Vallejo, CA Sun Aug 12, 2012

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Not in Benicia, although it is becoming common for a home to sell 10-15% over asking price.
Ebba Navas
Coldwell Banker Solano Pacific
1 vote Thank Flag Link Tue Aug 14, 2012
We are looking to buy this home in Benicia and it is way over valued, has been on the market for nearly 2 years now, the appraisal came in at $100K under asking price and the sellers wont budge. We are not prepared to pay that much over 'Market Value' and are walking away from this home.

They can stay on the market and hope that there is a buyer out there that is willing to pay that much over appraisal with cash.
0 votes Thank Flag Link Mon Aug 13, 2012
Don't judge the current situation by a house being for sale the prior two years. Two years ago, the market was dire; the home might have been reasonably priced then and NOW. Since you are here, looking for comments, I'm revising mine - seek a CMA on value from your agent; consider a second opinion and second appraisal from an alternative Mortgage Bank - perhaps one that specializes in this area/style of property. Some features can be difficult for appraisers to properly justify - in my market for instance, mountain views and backing to Open Space can dramatically change the value from one house to another across the street with the same layout but lacking the location.
Flag Mon Aug 13, 2012
Are you already in contract? How are you aware of the appraised value?
Flag Mon Aug 13, 2012
Is it the one on Columbus Parkway?
Flag Mon Aug 13, 2012
It isn't common for it to be THAT far off. It could happen if someone has really overpriced the home in the market it's in, just hoping to get that. Some homes do sell for an amount over apprased value if the buyer wants it bad enough & they have the funds to make up the difference, but I would still say it's not common for anyone to pay $100k over appraised value even if they had it.
0 votes Thank Flag Link Mon Aug 13, 2012
The recovery of the real estate market is creating appraisal issues. It is as if the appraiser and Realtor are both in the front seat of a car, driving down the road. The Realtor is looking out the windshield, at the market that is starting to take off, but the appraiser keeps saying, "slow down." The appraiser is looking in the Rear View Mirror at the past when just a few months ago it was a buyers market and home values were significantly lower. Is it common for appraisals to come in low? YES.
0 votes Thank Flag Link Mon Aug 13, 2012
No, it's not common. It is common these days for appraisers to come in low...but typically it's a much smaller amount than 100K. If a listing price and appraisal are that far off, there is truly something wrong!
0 votes Thank Flag Link Mon Aug 13, 2012
I wouldn't say it's common for a house to appraise that much less. Your Realtor should have run the comps first and advised you better.
It could be your lender. Some lender's pool of appraisers evaluate much less.
In this market of low inventory it is not that uncommon for houses to go $100K over list.
I recently bid $80K over list on a house for myself but I knew it would appraise.
0 votes Thank Flag Link Sun Aug 12, 2012
It depends what both the seller and the buyer think the house is worth. If you have a seller with unrealistic expectations and happen to find a buyer that will pay the premium then this will happen. I have seen flipped houses appraised well below contract price but the buyer waived the appraisal contingency because they wanted it that badly. Typically, these scenarios are rare since most people pay fair market value for a home and appraisers will not miss on the contract price unless there is a serious difference between appraised value and contract price.
0 votes Thank Flag Link Sun Aug 12, 2012
well, first of all - what is the list price?

There is a huge difference between a 300,000 listing appraising out for 200,000.... and a 1.2 million dollar house appraising for 1.1

But - the list price is irrelevant.

You ask...........Is it common for a house to appraise out for less than the list price?
Yes, it happens.....but that's not the real issue....more importantly, does it appraise out for the SALE price.No one cares about the appraisal vs the list price.............unless it sells for full asking.

Finally, if the house doesn't appraise out for the agreed-to sale price, most likely the buyer will not be approved for the loan (especially if there is a "satisfactory appraisal" contingency in the contract)
0 votes Thank Flag Link Sun Aug 12, 2012
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