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Asked by H, Minnetonka, MN Mon Aug 4, 2008

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Answers

9
Cameron Piper, Agent, Forest Lake, MN
Mon Aug 4, 2008
Cheir,

It is possible that your agent's impression of the house or the market have changed in that time. The market itself has not seen 11% appreciation over the past two months. My gut tells me that your agent thought that the market would stay cool and that the house would sit until they reduced to a more reasonable price, but we have seen some signs of the market heating up, your agent may be reacting to that.

Cameron Piper
Web Reference:  http://www.campiper.com
1 vote
Steve Vennem…, Agent, Pine Springs, MN
Sun Jun 10, 2012
I would put in the offer you are wiling to pay. The market has been pretty good in Minnesota this year homes are selling good luck. http://www.mnhomescontractfordeed.com
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Mon Aug 4, 2008
Jodi, the short answer, is yes, the amount of money a buyer is bringing to the transaction can impact whether or not a lender is willing to approve a mortgage on a property that might be appraised at a lower value than the agreed upon purchase price between buyer and seller. I have had transactions where the appraisal came in lower than what the sale price was and, even though we were able to negotiate a lower price, it still was not as low as the appraised price. My buyer had the option at that point to cancel the purchase agreement, but chose not to. Because the buyer had a substantial amount in down payment, the lender left the decision up to the buyer. The less money the buyer has in downpayment, the more decision making power the lender has.

I also have to say (and I don't pretend to know your specific area) that prices have decreased from'07 to '08, and in some areas, very dramatically. So that could account for some of the difference between '07 and '08 sales.
0 votes
Sandra Potter…, , 80123
Mon Aug 4, 2008
Actually, there is more to an offer than the price. The contract is made up by price, terms and conditions. The short answer is have your agent do a market analysis using comparables from the MLS. Those are statistics that can't be changed. Several closed sales can affect the current market value. The terms: are you asking for seller consessions? Points, repairs, closing costs? Conditions: Is the property in good condition or does it need lots of repairs or updating or does it have any stuctural issues? Any contract written will only be an offer until all parties agree to all of the above. Good luck!
0 votes
Jodi Nain, Both Buyer And Seller, Kew Gardens, Queens, NY
Mon Aug 4, 2008
Susan,

Yes, thank you. I'm currently trying to make sense of two apartment sin my building that was sold $131,000 difference in price, given the the low end is (sold 06/2008) $169,000 ground floor (perhaps hard sell because of so) and the top floor is $300,000 (sold 06/2007) probably the same condition just different view/height). Still so, the $300,000 apartment is at least $60,000 more than comparable apartment even in today's price.

How did the buyer get the bank to agree to mortgage? If a buyer is willing to put 50% down, would then this situation possible because technically the mortgage is still higher than the appraised value, thus making the sale possible? Is there another possible way, which I doubt?

Thank you in advance.
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Mon Aug 4, 2008
Yes, you are correct, Jodi, but the part of the process Cheir is referring to is prior to that determination happening. The bank will determine the value for which they are willing to render a mortgage, but that happens when they have an appraisal done. The offer presentation takes place in order to generate that process to occur. So, in order for Cheir to put in an offer, there needs to be a meeting of the minds between Cheir and the agent to decide what price to offer for the property. The discrepancy is that the agent seems to be waffling about what they think the property is worth and the market doesn't bear out those inconsistencies. Make sense?
0 votes
Jodi Nain, Both Buyer And Seller, Kew Gardens, Queens, NY
Mon Aug 4, 2008
Wouldn't the bank be the one who has the last say? Meaning, if it is truly overpriced, nowadays the bank will tell you outright that you're not eligible for a mortgage for that particular house because that can only mean that their collateral is less valuable than the appraised value of the home. Any more thought with this, I'm curious as well.
0 votes
Paul Huynh, , 55447
Mon Aug 4, 2008
I agree with Susan. Your agent needs to show you some comparables to justify his opinion on the home price. This should be part of the conversation/proces with your agent before making an offer on any property. I'm curious on what the list price is on this particular house.....has it been reduced since you saw it 2 months ago?
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Mon Aug 4, 2008
Yikes!
Hate to say this, but either the agent was wrong before when he advised you about that price or he's wrong now. I don't know where the property is located, but it would seem unlikely to me that a house not worth $450K 2 months ago would now be a steal at $500K anywhere in the Twin Cities. I don't work outstate, so I don't know about those areas. I think you might ask him to bring up the comparably sold home prices in the area of that home and decide whether or not his first impression was wrong or if his most recent impression is wrong. The prices the comparable homes have sold for most recently is the information that everybody accesses to be one of the most important determining factors in pricing.

Good luck, Cheir!
0 votes
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