Home Selling in 11210>Question Details

Sue, Both Buyer and Seller in 11210

Cash offer and appraisal

Asked by Sue, 11210 Mon Jul 2, 2012

The cash buyers did a appraisal and it came in at $720. They offered me $770 prior to the appraisal they now dropped there price to $755. I did my own appraisial and it came in at $780 but buyer say they did not use viable comps becuz one comp home was 1000sq ft bigger and lot was 1800 sq ft bigger. So they say this comp isn't viable becuz thers was other more viable comps available . So I lost deal at $770 and I didn't agree to $755. Do you think if I got buyers with a mortgage it would be better becuz they will not care if it comps lower and bank gives them mortgage. Will bank give mortgage if the new buyer has a larger down payment and it appraises lower than purchase price. I purchase home in 2009 for $795

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Sue,
Michael is 100% correct!

The reason for an Appraisal is to protect the Bank's deriere; they need to know that the value of the property exceeds the Loan amount. They will only lend 80% of the Appraised Value.

If there is no Loan, there is no need to have an appraisal.
All that is necessary, is that the Seller and the Buyer agree on a price.
So far, that hasn't happened for you.
Perhaps the next Offer you receive will be adequate for you.
Now, appologize to Michael.
0 votes Thank Flag Link Mon Jul 2, 2012
If I was buying a house I would want to know true market value. Who in there right mind wouldn't? Wether they are getting a loan or not. Even, I am smart enough to know that! If I were to purchase another house cash I would appraise the property I intended to buy
1 vote Thank Flag Link Mon Jul 2, 2012
This is directed to realtor Mitchell Feldman are you trying to say cash buyers don't get appraisals done. I never heard of anything more ridiculous come out of someones mouth. If I where a cash buyer I would have the home appraised. and thanks but no thanks I have a agent.
1 vote Thank Flag Link Mon Jul 2, 2012
Dear Sue:

You have asked similar questions in the past. At this point I think you need to hire an agent to protect your best interests. Usually with a cash deal an appraisal is not even done. A deal carrying a mortgage contingency is contingent on the property appraising satisfactorily. That means that if the appraisal comes up short OR if there is some other material defect within the property that the bank doesn't like, they will deny the loan!

A cash deal is much less risky and simpler. Your deal is taking way to long and the more time that goes by the more games your potential buyer will play. You need to take control of the situation and the only way for you to do that at this point in time, in my opinion, is to hire an agent to represent you and speak to the buyers on your behalf. You need an advocate!

Please call me to discuss this further. I would love the opportunity to assist. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
1 vote Thank Flag Link Mon Jul 2, 2012
No Lender will give any borrower more money than the appraisal value. Ever since the housing bubble burst, lenders have been subjecting mortgage applicants to stricter criteria.

Best of Luck,

Maria Cipollone

http://www.Flahomespecialist.com
0 votes Thank Flag Link Thu Aug 29, 2013
Every player plays their part.

The Agent wants to list and sell fast.
There is no perfect CMA this is all based on current homes sold. The Agent averaged out a range of homes that came close to what you have to sell. Although such a bad sample (1000 sqft off the mark) can really change the numbers on the CMA. If the Agent didn't visit the home to access any repairs needed, the Cash Buyer's CMA might be more accurate, but be warned this is a Cash Buyer.

The Traditional Home Buyer wants to buy low. It doesn't matter the cost of the home or the CMA, whatever a person will get approved for by the bank, that is what they can spend, period.

The Cash Buyer wants to buy low to live in, rent out, hold and flip years later, flip right away for a profit, or a combination of those but one thing is clear if this is a Cash Buyer they need to make a profit so they will buy at around 70% of the After Repair Value. If the home is in perfect condition no repairs needed, take the market value for the home and deduct 30% percent, that is what he Cash Buyer will pay. If repairs are needed, get an estimate of all repairs needed and deduct that further. So 70% of market value - repair cost - closing costs (depends on if you are paying this or they are) and you get what a Cash Buyer will pay.

The difference between $755 and your appraised value of $780 is $25,000, why not meet the Cash Buyer in the middle? This must be an amazing house with nice features for a cash buyer to pay will above the norm of 70% of market value ($550,000 in this example)

Note: If you list the property and you know the CMA already $780, how many people you know will pay retail for any house in the current market? Not many. Now your location is key, the area might be coming up (values are rising) or going down. Ask this to the person that gave you the CMA for $780. If its going down, I'd take $765. If its going up, I'd take $775. If you need to sell now and by selling at $755-$775 you still pocket an acceptable sum on the sale, then take it!

Look at how motivated you are to sell, your need to sell, the trend of home values in your area, this is key.
0 votes Thank Flag Link Fri Nov 30, 2012
Dear Sue:

I didn't mean to upset you with my previous answer to this question.

I have been selling homes since 1993 and have been involved in thousands of deals. I have been involved in hundreds of all cash transactions. Although it is true that on a rare occasion an all cash buyer may feel the need to do an appraisal, 99% of the time they do not do an appraisal. The reason being that most all cash buyers already know what the property is worth and they know what they are willing to pay and they just buy the property.

If you are a buyer and feel the need to do an appraisal to confirm your thoughts on value, that is your right and I respect that, but it is definitely not the norm. Any real estate agent that actually sells homes in Brooklyn will tell you the same thing. It is not ridiculous, it is a fact.

I am alarmed to hear that you have an agent and that your agent is not shepherding you through this process. If your agent is any good you would be much better served asking him or her these questions rather than asking strangers on Trulia. Your agent is familiar with all the particulars of your deal and would be more qualified to answer these questions than anyone else.

I hope your deal works out and I wish you the best of luck! If you want to discuss this further, feel free to contact me.

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Tue Jul 3, 2012
My agent told me most cash buyer do a appraisal all the time because just like a bank they do want to protect themselves just like a bank. Only investors may not do appraisals because they already had a drive buy done.
Flag Tue Jul 3, 2012
Was there an appraisal clause in the contract of sale ? A contract can have many written conditions added to it and one might have been the buyers right to an appraisal
0 votes Thank Flag Link Mon Jul 2, 2012
You lost a deal over a few thousand dollars when you were dealing with hundreds of thousands? Cash? A guaranteed close? I think you need to re evaluate your sitation and understant the economy we are living in.

If you want me to pull this deal out of the fire and back into the pan... Give me a call.


Luke Constantino
Commercial | Residential
REMAX PARK SLOPE
Direct: (212) 300-3919
0 votes Thank Flag Link Mon Jul 2, 2012
If the appraisal is lower then the sale price the bank would have an issue with the sale. Appraials are not always an exact science . Things like location, square footage , condition , property size can effect the value . When dealing with a real estate broker setimes these issues can be worked out easier. A deal should not fall apart for 15,000 on a house in this price range
0 votes Thank Flag Link Mon Jul 2, 2012
Try not to lose any deals especially in today's market--keep in mind that a home is worth what someone is willing to pay for it; it doesn’t matter what the seller needs or potential buyers can afford to spend. Market conditions do matter as does the immediacy for a transaction to take place. In setting a price, it is in the seller’s best interest to focus on the current market conditions--to consider, would you purchase a home if the appraisal is lower than contract price....
0 votes Thank Flag Link Mon Jul 2, 2012
There is way too much to say. However this is a buyers market at the price is determined by the market. Cash will always get a better rate because that will guarantee a speedy closing giving there is no other issues with the property. Based on what you said without specifics( the location and details of your home) it seems like walked away from a good deal. I don't know any buyer that will go out their way to purchase way above market value in this market. If I can be of service, let me know.

Claudia Norman
Exit Realty Central
347-733-6433.
0 votes Thank Flag Link Mon Jul 2, 2012
The rule with Banks is - contract price or appraised value, whichever is lower. Period
0 votes Thank Flag Link Mon Jul 2, 2012
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