Disclaimer â€“ I am only making the following comment from what I read without knowing all the details and facts (boxes checked, addendum written, communications among all parties) - The details are what really count which we donâ€™t have. .
I am assuming that you have a loan contingency and an appraisal contingency in place when you signed this contract with your agent (in this case, also the listing agent) advise. I am also going to assume that with the same advice, you have NOT yet removed those two contingencies.
The appraisal contingency, IF (a big IF here) you checked the appropriate boxes, basically says that the purchase agreement is contingent upon the property appraising at NO LESS THAN the specified purchase price, and it allows you to either go ahead and remove the appraisal contingency or cancel the agreement.
So, if I was you, unless you feel the upgrades in this house is worth the additional $100,000, and that you can get loan with the lower appraised value (simple example at $1,000,000 and 80% loan, you would be getting $800,000 loan. You will put $200,000 down. However, with the house appraised at $900,000; youâ€™d get $720,000. You will have to come up with $280,000 down payment in order to purchase); this is a good time to bargain BEFORE you remove the loan and appraisal contingencies.
I disagree with Tman (sorry, Tman); it really does not matter whether you or your agent go in and negotiate for you. The issue is whether you will be ready to walk away from this property if the seller refuses to lower the price â€“ not saying this is going to happen, but you need to mentally prefer for that to be strong in your negotiation. Tell your agent that this is the case, and you canâ€™t and wonâ€™t come up with the additional $100,000. Either the seller agrees or you will walk. (O.K. real negotiation might be a bit different; I will have to know the seller, agent, etc).
In a sense, the agent has more in stake representing both sides, not just because of the double dipping on the commission, but also for not (Again, another assumption here) showing you the proper comps.
They might ask for another appraisal, but it depends on whether the lender will agree with that or not.
The bottom line is; if you have not removed your contingencies, the ball is in your court as to how YOU want to negotiate and you have the full right to do so.
A side question, Omar, did you KNOW the comps before you make the offer on the house knowing fully that this house is priced high due to the upgrades? Did you also convey the idea to the seller/listing agent that you know the price is higher than normal but you love the house so much that you are willing to pay that amount? . I am just curious because I donâ€™t want to make wrong assumption on the situation. The truth in Real Estate is that buying residential property is a much more emotional process. I have people who just absolutely wanted the house because the house fits their needs perfectly for the timeframe they are looking at and they fell in love with the house. This can not be discounted when talking about buying homes.
Sometimes there is more than one right way.