Property Q&A in Southfield>Question Details

greathousegr…, Home Buyer in Southfield, MI

Why is this house over priced when its not going to meet the appraisal cost>?

Asked by greathousegreat, Southfield, MI Sun Jan 6, 2013

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Good Morning,

First, because this is the United States of America and a seller can ask whatever price they want for their property--no matter how unrealistic their expectations are. Second, because many local sales go for cash which requires no appraisal, and third, I'm not so sure that it wouldn't meet an appraisal at that price. There is currently a $91k property pending with .5 mile of this property and comparable sales in the immediate area that could support this asking price. Property appraisal is as much of an art as it is a science, and value estimation can vary widely from appraiser to appraiser, so you can be too certain as to where the appraisal value will end up.
1 vote Thank Flag Link Mon Jan 7, 2013
I agree with the people below. All it takes is one buyer to think that it is not overpriced and it will sell. It's all about the comparative market. If you would like some help finding a home that is within your price range you can contact me at the info below!

Amber Leatherman
Coldwell Banker Weir Manuel
Cell: 248-924-7733
0 votes Thank Flag Link Mon Jan 7, 2013

You never know who has cash to put down and wants a particular property. It only takes one cash buyer.

Contact my brother and I for your real estate needs!

Jamie L. Rodgers
My Realty Select
The "Mr. Rodgers" Team
The Bros Who Are Real Estate Pros
0 votes Thank Flag Link Mon Jan 7, 2013
I wouldn't exactly call a 1300 square foot brick ranch in Soutfiled "overpriced" at $90,000. It appears to be in reasonable condition. Nevertheless, it is not uncommon these days for a home to sell above an appraisal price. The buyer simply needs to waive the appraisal contingency, generally found in the purchase .agreement.
Depending upon the amount of the down payment, it may not be necessary for the home to appraise at all. As an example, if it is a cash transaction. Or if the buyer is putting a significant down payment into the purchase, the lender would consider approving the mortgage,as well. (For if the buyer was putting down $30,000 on a $90,000 purchase, the bank may approve a $60,000 loan, even if the appraisal came in below the purchase price.
Good luck!
Any questions, call me at 248 935-0335
Mark Mergener
0 votes Thank Flag Link Mon Jan 7, 2013
The price of a house should be determined by the sales prices of recently sold comparable homes. However, there are times when the seller's hands are tied by how much they must make off the sale to pay off their existing mortgage. In this case they list it high enough to pay off the loan, even if the market shows it is over priced. If they by chance get a cash buyer and no appraisal is required they could still sell. Even if someone is using financing and the house doesn't appraise if the buyer is willing they could still purchase the house. The buyer would just need to bring the deficiency to closing. I hope this helps you!
0 votes Thank Flag Link Mon Jan 7, 2013
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