Is it a bad move to hope that a house appraises for lower than my offer?

Asked by Jestamick, 48336 Mon Apr 19, 2010

I recently found a house and absolutely fell in love with it. I placed an offer on it for 5k less than the asking price including closing costs. I heard back two days later from the seller saying that the house had two other offers on it. They were collecting highest bids by the end of the day.

Here's where I screwed up. My agent said that he was certain the house would go for above asking price. I ended up agreeing that 10k above asking (with closing costs included) wouldn't break the bank and would probably seal the deal.

They verbally accepted the offer. I later found that similar houses in the area were selling for much less. My agent informed me that if the house appraised for less, we could renegotiate the price (if no loan could be obtained). I have the papers, but haven't signed. Is it a bad idea to hope for a lower appraisal? Backing out now might anger the sellers and ruin my chances of getting it. I just don't want to buy for more than it's worth.

Any advice?

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Joan Congilose’s answer
Joan Congilo…, Agent, Freehold, NJ
Mon Apr 19, 2010
Hi Jestamick
If the house received 3 offers on it the same week than it is most likely priced right. If it is a house that you absolutely fell in love with & you got your offer accepted be thankful that you have an agent that knows the market & you got the house! Think positive, & look forward to the day you close. If by chance it should underappraise the lenders have to notify you & you can then contact your lawyer & see if the price can be adjusted so you can still buy the house but most likely it will appraise.
Web Reference:  http://www.joancongilose.com
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Mon Apr 19, 2010
Jestamick - if you love the home and can comfortably afford the price you offered...then play it out, and see what happens. Make sure you're ok with paying the higher price if it does appraise out.

Recently, my buyer made an offer of 436,000 on a home listed ar 429,000..........there were 5 offers, and he lost out to a bid of 441,000. My buyer was upset he lost it. The irony is, the house just closed, and sold for.... 429,000, as it did NOT appraise out at the higher number of 441,000!.......they renegotiated, and that buyer lucked out.......he bid the highest, but wound up paying much less than other offers. It can happen, but don't bet on it!

If you back out now, forget "angering the sellers"..... you might lose out to one of the other bidders.Decide how much you want it....and.....if you're comfortable with the price..............if you will be living there a long time, then paying a little more may not be so significant..........think all this through, and then decide how to proceed.

Good luck.......
0 votes
Dan Chase, Home Buyer, Texas City, TX
Mon Apr 19, 2010
The worst problem is not if you make an offer that the appraisal will not allow.

What happens if you pay more than you wish to pay and the appraisal allows the higher price?

Make sure you have contingencies for both appraisal and inspection.
0 votes
Joan Braunsc…, , Morris County, NJ
Mon Apr 19, 2010
Appraisals are a huge reality check that sellers are having to deal with these days.
No, it isn't bad to hope that a house appraises for less than your offer.
The only issue would be if the sellers refused to come down in price and there would be other buyers that are willing to pay the difference.
It sounds like you are realistic about this house and if you don't want to buy it for more than its worth, then it will give you an opportunity to walk away if the sellers do not wish to come down in price.
You just have to be prepared to walk away. Not always an easy thing if you have already fallen in love with it.
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