Margaret Lyn…, Home Buyer in Dallas, TX

The house i'm interested in is appraised at 215.000.00,the owner is asking for 240.000.00,they did upgrades,what would be a fair bid to start

Asked by Margaret Lynch, Dallas, TX Fri Aug 13, 2010

with. starting bid

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If you are talking about tax appraisal...you need to read my blog post. Often hugely inaccurate....above or below the market value.

http://activerain.com/blogsview/1703533/tax-appraisal-values…

One home I looked at today shows:
2002-2004...3years at the same value
2008-2010....3years at the same value (increased since 2004)
in 2007 to 2008 nearly $40,000 jump in value.
This just goes to show you how the tax values can't be trusted as market values....and should never be used as a basis for offers.
Do you really think the value of any house stayed exactly the same for 3 years 2002-2004 or 3 years from 2008-2010....was there some magically price hike in 2007 to increase the value by $40000? I don't think so.
They're interesting to look at...the only thing they are good for is estimating taxes.

If you have a bank appraisal for $215,000 that is an entirely different issue. Just let us know if that is the case as there will be a very different answer. Your realtor should be explaining this to you. If not let us know and we can assist you. Again tax value above or below the asking price is NO indicator of a good or bad deal.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Fri Aug 13, 2010
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Choose a knowledgeable agent (maybe a buyer's agent) that will be working for you. Since they will negotiating for you, let their expertise work for you. Every area is different and all certainly have scenarios that will play out for better or for worse. Your agent should be able to negotiate a price acceptable to you.
1 vote Thank Flag Link Fri Aug 13, 2010
Without knowing the particulars of the property it would be difficult to give an answer that fits the situation.

It's possible the house is appraised well under market for its amenities and condition, but on the other hand the tax appraisal could be accurate or above market. Please remember that sellers don't offer properties at the lowest price they'll take - the list price is usually the highest they think they can get. Some will come down from that, others won't.

Ask your Realtor what comparable houses are selling for and from that decide a negotiating starting point.

Check out the area and prices at http://www.DallasHomeValueReport.info
0 votes Thank Flag Link Mon Aug 23, 2010
However buyer seems somewhat unrealistic according to the appraisal. It really depends on how much you want the house and how you are going to finance. If the appraisal is a current fair market appraisal then the buyer maybe asking too much and you should offer 10-15 % off the current fair market appraisal . If you offer more than a current fair market appraisal, then you are going to have to come up with the extra cash for the downpayment because the bank is going to lend you a percentage of the current appraisal amount.
0 votes Thank Flag Link Fri Aug 20, 2010
10-15 % off asking price that is.
0 votes Thank Flag Link Fri Aug 20, 2010
Approximately 10-15 % is usually a good place to start depending on the market.
0 votes Thank Flag Link Fri Aug 20, 2010
$190,000 might be a starting point, perhaps ending at $215,000, what it's worth.
Web Reference: http://www.golftobeach.com
0 votes Thank Flag Link Fri Aug 20, 2010
If that's the appraised value of $215K and not the tax value then it's worth $215K and why would you offer more than what it's worth. Sometimes upgrades don't necessarily mean that they'd get every dollar back for that either. Of course the owner wants that and perhaps not realistic for that neighborhood. Just because they want that it doesn't mean that its worth that.
0 votes Thank Flag Link Fri Aug 13, 2010
Margaret,

Are you looking at the tax appraisal? If so, this is not related to a bank appraisal and is common mistake. The tax appraisal is a lagging indicator and is not typically an accurate reflection of market value.

Bank appraisers will compare the home you wish to buy against 4-6 months of recent sales in that neighborhood. This will determine how much the bank will lend you. Your Realtor should be able to provide recent comparables (the bank appraiser will look at the same information) and give you guidance on an appropriate offer. If you're not using a Realtor...get one! Our services don't cost the buyer anything and can save literally thousands of dollars and untold heartache. It probably sounds like a broken record at this point, but if you are willing to use this forum as a resource you are already relying on a Realtor's expertise and know-how! So take the next step and call one to help you navigate this process.

Best of luck,

Andrea Brooks
Keller Williams
469-450-1326
Web Reference: http://BrooksTeam.com
0 votes Thank Flag Link Fri Aug 13, 2010
Keep in mind that the appraiser factored those upgrades into his/her valuation, and still came up with the value of $215K. You'll have to come out of pocket for anything you offer to pay more than the appraised value--in addition to the down-payment you would have payed had you payed no more than the appraised value and your portion of the closing costs.

Another option is to offer that seller his/her asking price provided s/he agrees to sell with owner financing.
0 votes Thank Flag Link Fri Aug 13, 2010
I don't understand how there has been an appraisal when the property is still an active listing. The appraisal is generally ordered by the lender of the buyer. If you are talking about a Comparative Market Analysis at $215K then the max I would offer would be 6% above the $215K or $225,900 and that is if I absolutely had to have the house. I would put in the contract that the house had to appraise by the bank's appraiser at full contract price. If it doesn't then I would negotiate the price with the seller based on teh appraisal to stay in contract. If the house does not appraise realtors will often show the appraiser comps that they used for the Comparable Analysis. In FL we have a system where lenders call a central number and an appraiser is assigned. So it is possible that an appraiser that is not familiar with the area will be pulling the comparable information and grading the house without any other information. It is worse when there are a lot of short sales and foreclosures. You always have an option to ask for an appraisal before you put in a contract but that is a waste of money unless you are paying cash. Hope this was helpful.
0 votes Thank Flag Link Fri Aug 13, 2010
Margaret, do you mean assessed value for tax purposes perhaps? If this is the case, you can ask a realtor how accurate these values are. Also, they can do a comparative market analysis to help you decide on a bid.
0 votes Thank Flag Link Fri Aug 13, 2010
Hi Margaret.
That is an interesting question that you ask as value is always in the eye of the beholder.
There are some facts that should shed some light on what others feel that similar home is valued at. If you have been working with a realtor you should be armed with, not only what is for sale of similar size, construction and condition in the immediate area and neighborhood, but also with what has sold in the last several months.
This will give you some insight. Remember that your offer to the seller is an opportunity for them to sell you their home and most probably they will be happy to have the opportunity to either accept your offer or begin negotiations with you.
If I may help you in this process feel free to contact me.
Sincerely,
Victoria Barr
Keller Williams Elite Park Cities
214-213-2593
victoriabarr@kw.com
dallashomesbyvictoria.com
0 votes Thank Flag Link Fri Aug 13, 2010
Fair bid to start with ? Then how would you have an appraisal AND appraisal is completed after you have an exectued sales agreement, completed inspection, and ordered through the lender.

Where did the appraisal come from ? Appraisal is an paid for by you .

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Fri Aug 13, 2010
Margaret,
You do not mention if you are working with a Realtor. If you are they should be running comparables to help you make an informed decision. You also do not say when the $215,000 appraisal was done. Appraisers are only going back 3-4 months for sold data. Was the appraisal done for a refi or when this seller bought?

The only person who can really help you make some sound decisions needs to have been in the house and hopefully know the neighborhood.

If I can provide any assistance let me know.

Mary Beth Harrison
The Harrison Group
Keller Williams Realty
214-365-6500
mbh@DallasNative.com
Web Reference: http://www.DallasNative.com
0 votes Thank Flag Link Fri Aug 13, 2010
You will get the best answer from your Realtor. It is hard to tell anything without knowing the property, area and condition.

Good Luck,
Pelin
http://www.dallashomelist.com
0 votes Thank Flag Link Fri Aug 13, 2010
Margaret,

When you say it was appraised for $215,000 do you actually mean appraised or that is the tax assessed valuation on the property? They can be two entirely different values. As far as a starting bid, you need to speak with your Realtor regarding the amount. They should be able to show you comparable properties in the area so that you can see what they are selling for. That should give you a good idea of where to begin and where to end. Good luck!!

Jackie Rankin
Tru Value Realty
0 votes Thank Flag Link Fri Aug 13, 2010
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