Home Buying in Stockton>Question Details

Christina, Home Seller in Sacramento, CA

Is it ok to bid more than the asking price on a property? Will the price be based on the appraisal value?

Asked by Christina, Sacramento, CA Fri Nov 6, 2009

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Is it ok to bid more than the asking price on a property? YES
Will the price be based on the appraisal value? NO - the "loan amount" will be based on the appraisal.
But having been involved in a couple of transactions where an offer was made and accepted by the buyer (under contract), if the "higher" offer comes after a lower offer is accepted, their can be considerable legal raminifications if the seller tries to switch offers. If this is the case, contact an attorney.
0 votes Thank Flag Link Tue Dec 15, 2009
Your question is a question for your realtor, however, it is my understanding that yes you can. However, the home loan is always based off of the appraised value or purchase price whichever is less. If the appraised value comes in lower than the price and the seller is not willing to negotiate, you can still come in with the diffference to make the loan work if that is an option for you.
0 votes Thank Flag Link Tue Dec 15, 2009
http://www.trulia.com/voices/Agent2Agent/Any_thoughts_about_… <--- look and read this thread. It talks about the delicate art of appraisal. I was shocked by some of what I saw in it. But I think I learned a lot also.

You need to have an appraisal contingency in your offer. Otherwise you could lose a lot as you might be forced to buy what you can not afford to buy.

I do not understand the idea of paying more than the buyer is asking for. But if you want to the only one it hurts is you and your wallet. Just do not pay more than a property is worth. It is likely enough to find prices drop more without overpaying now.
0 votes Thank Flag Link Fri Nov 6, 2009
Hello Christina,

Yes, you can bid more than the listing in fact in todays current competitive market it's a given however you and your agent need to do your research namely the sold comparables to see what other properties similiar to this property is selling for however as mentioned by the other agent on this posting you will not know until after a fully executed contract has been signed by both parties to the transaction. That is why it is so important before you sign anything upon being accepted to read the sellers contract and addendums to look for language that may state that if you overbid you could be responsible for the overage and the seller may not negotiate to the actual appraised value. Is your agent going through this process carefully with you?

Al Espinor Jr., GRI-Realtor
Chinchiolo Realtors
7301 Pacific Ave.
Stockton, Ca. 95207
(209) 351-3180
0 votes Thank Flag Link Fri Nov 6, 2009
Sure it's OK. What's NOT OK is to bid more than the property is worth. To determine the property's value, ask your Realtor for a CMA.

No, the price will not be based on the appraisal. The appraisal comes after there's a ratified offer. The asking price is determined by the seller, hopefully with input from the seller's agent, on the value of the property. The amount a buyer offers is based on the value of the property and his/her desire to purchase it. If there's an agreed-upon price, the appraisal establishes the amount that the lender will lend on the property.

The risk in someone offering more than the listing price is, if it's way out of line the home won't appraise for the proposed purchase price.

Hope that helps.
0 votes Thank Flag Link Fri Nov 6, 2009
Don Tepper, Real Estate Pro in Fairfax, VA
Yes, it's ok to bid more than the asking price. Why anyone would want to pay more than what is being asked is beyond me, assuming the asking price is within a reasonable amount of the appraised market value and not inflated over market value. The buyer's lender will only lend on the appraised value of the property, so the buyer will have to come up with the difference between what was bid (or accepted) and appraised market value.
0 votes Thank Flag Link Fri Nov 6, 2009
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