My appraisal came in just above my sale price (yeah I can get my loan), but what does this say about my negotiation ability?

Asked by Mario , San Francisco County, CA Wed Mar 24, 2010

I'm more curious about this for future purchases, but does this mean that I could have negotiated better, or is it common for buyer and seller to be in balance?

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Alan May, Agent, Evanston, IL
Wed Mar 24, 2010
BEST ANSWER
I think I misunderstood your question at the beginning, and after re-reading, I think I get it.

You're concerned because you feel that you should have been able to negotiate a harder deal, because the appraisal came in only slightly higher than what the two of you agreed on.

It's very common, in today's market, for appraisals to come in at EXACTLY the purchase price. Appraisers are hesitant about "over-appraising" property, and to that end, often match the purchase price, if they find that they have documentation that can support it. It's very common to find appraisals coming in BELOW the agreed-upon price, and then the buyer and seller find themselves @ "decision-time" trying to determine if they go forward at all, or renegotiate the contract.

So, I think you did well... you drove a hard enough bargain, that the appraisers felt comfortable appraising your property HIGHER than the agreed upon price... you may still feel free to do that dance. You rock!
1 vote
Don Tepper, Agent, Burke, VA
Wed Mar 24, 2010
Alan's correct. And even in strong markets, it wasn't unusual for the appaisal to come in right at what the contract purchase price was for. That's happened to me a couple of times when I've bought my personal residence.

Honestly, you might have gotten the deal of the century and it's still likely that the appraisal would have come in within a few percent of what you agreed to pay. So, really, don't worry about it. All you really know is that you got a good deal--somewhere between good and excellent.

If you were working with a Realtor and he/she did a CMA on the property, it's likely that the CMA is a better reflection of the value of the property than the appraisal.

Hope that helps.
1 vote
Antoine Pirs…, Agent, Oakland, CA
Wed Mar 24, 2010
Hello Mario:

Let's not forget something REALLY important. The appraisal is an "opinion" of value, and not a fact. You ask 3 apprasiers and they will all come up with a different number.
You got what you wanted for the price you wanted. Should that not make you HAPPY?
Good luck.
Antoine
1 vote
Mack McCoy, Agent, Seattle, WA
Sat Mar 27, 2010
Nothing. It says nothing about your negotiating ability, good or bad.

Appraisal is difficult work, in that it's not easy to determine value from one visit to the home and looking at photos of four comparables.

Appraisal is a lot easier, however, with a purchase-and-sale agreement in hand.

Don't blame the appraisers, however - shopping is a lot easier when the prices are readily marked, too.
0 votes
Rose Nied SH…, , Oakland, CA
Sat Mar 27, 2010
Mario, Congratulations! Yes it is a good thing that your appraisal came in higher than your sales price. If it had come in lower there would have been many implications which might have compromised the sale of your home...and it might have meant that you needed to come in with more cash. So in this market, indeed this is rare. I don't know how you could have negotiated better...You did a good job. You seem to have gotten a house at a ver good price...Best of luck! Rose Nied, Alain Pinel Realtors
Web Reference:  http://www.apr.com/rnied
0 votes
The Medford…, Agent, Fremont, CA
Thu Mar 25, 2010
Mario:

Congrats on your appraisal coming in higher … that is a significant feat all by itself! SO many appraisals these days come in low and then you are faced with the following:

Missed It By THAT Much: Top Four Solutions To Low Appraisals
http://bit.ly/cuRmfY

@Pacita: “And count yourself lucky that the appraisal came in at ABOVE and not below.”

No kidding.

@Don Tapper: “even in strong markets, it wasn't unusual for the appraisal to come in right at what the contract purchase price was for …”

Exactly correct – and a few others below have stated the same. I’ve seen SO many buyers disappointed because the appraisal came in RIGHT ON THE NOSE. Happens ALL the time. The fact yours came in higher is actually VERY rare.

@Leanne Finlay: “The appraisal value is mostly to "prove the value" of the negotiated price, and often appraisers don't show a higher valuation because that really isn't what they are being asked to do. They are being asked to prove the negotiated value so the lender has that opinion of value in their file.

Spot on.

@John Juarez: “Don’t second guess yourself …”

Totally agree.

@Alan: “So, I think you did well... “

Me too!

@Balki Bartokomous: “Now we are so happy, we do the dance of joy!”

HEY!!
.
0 votes
John Juarez, Agent, Fremont, CA
Wed Mar 24, 2010
Mario,

Good job and congratulations on your success! You should be pleased that the appraisal came in higher, even if only a little bit. If you are implying that you think you should have negotiated a lower price, I wonder how your seller would have reacted to continued negotiations. Maybe the lower price was not to be had.

There is such a thing as a glass half full. You succeeded in your quest to buy a house at a good price. Don’t second guess yourself
0 votes
Elynne Maree…, , Danville, CA
Wed Mar 24, 2010
Be thankful! It could have been reversed. Is your Country considered Distressed?
0 votes
Pacita Dimac…, Agent, Oakland, CA
Wed Mar 24, 2010
Sounds like you got yourself a good deal.

And count yourself lucky that the appraisal came in at ABOVE and not below, otherwise, you may not be able to get a loan to buy the property

By the same token, if the appraisal came in at below your offer price, however, you can use that and try to negotiate the sellers to reduce the offer price to the appraisal price. Not all sellers will agree to sell at the lower price value...so don't count on that either.

But you can count your blessings and move on.

Congrats
0 votes
Jessica DeL…, Agent, Berkeley, CA
Wed Mar 24, 2010
Hi Mario,

The answer to your question really depends on your local micro market. Where there multiple offers on the house? Your agent may have advised you at your offer price based on the competitive nature of the area and desireability of the house. What were recent sales for comparable houses?

I know in the east bay right now we are seeing a lot of appraisals come in below offer price because there is so much competition to even get into contract~so I would definitely say you are lucky to be buying a house with some equity already built in!

Best of luck to you on a smoothe close of escrow!

Jessica
0 votes
Vickey Wacht…, Agent, Katy, TX
Wed Mar 24, 2010
Your Negotiating skills or the sellers??? How far down did you get the price from the list? What were the comps for the area? How is the market in that area? There is an art to negoitations but it all boils down to what the seller is willing to take and what the buyer is willing to pay!!! You are fortunate that the appraisal came in, many are not these days and if you use that as a barometer for your skills than I would say you are very good!!
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Wed Mar 24, 2010
Awesome job Mario!! I love working with people like you that love to negotiate a good price rather then fall in love with a home and offer whatever they want!! Way to go!!! Good luck in your new home Mario! :)

Kamal Randhawa
Broker
510-932-1066
0 votes
Leanne Finlay, Agent, Kirkland, WA
Wed Mar 24, 2010
Mario, it sounds like the seller gave you a great deal!

Appraisals can vary, so you could also say if you had 12 different appraisals done, you might have had 12 completely different price valuations.

The appraisal value is mostly to "prove the value" of the negotiated price, and often appraisers don't show a higher valuation because that really isn't what they are being asked to do. They are being asked to prove the negotiated value so the lender has that opinon of value in their file.
0 votes
Katie O'Shea, Agent, Oakland, CA
Wed Mar 24, 2010
remove your appraisal contingency and buy the house.
0 votes
Jane Grant, Agent, Aguanga, CA
Wed Mar 24, 2010
Mario: You are wanting more of a spread between what you offered and what the appraisal came in at? In this market, there are many recent sales so it is easy to price a listing.

In other words when there are several homes in the area that have recently sold for a certain amount of money, everyone is aware at once what current prices are and it is common knowledge what is reasonable to both buy and sell.
Web Reference:  http://www.soreal.biz
0 votes
Alan May, Agent, Evanston, IL
Wed Mar 24, 2010
it says "you rock" as a negotiator!

do a little dance.
0 votes
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