Are people paying over appraisal for homes? (Austin: real estate, renting)

[AustinDude360]

Hello,

I read up in a local Austin real estate blog that buyers are being advised to waive appraisal when making an offer on a home to strengthen their positioning. While I recently purchased and actually paid a decent amount under appraisal, I'm curious if this is the activity we are seeing with desperate and cash buyers.

[Idlewile]

Our buyers offered no appraisal contingency. Meaning, they still needed the appraisal but would pay the difference themselves if the house did not appraise. (There are not cash buyers, clearly.) This contributed to us selecting their offer, although there were other perks too.

[riaelise]

There's no way I'd ever overpay. Period. I'll find a house somewhere else.

[InATX]

Originally Posted by riaelise

There's no way I'd ever overpay. Period. I'll find a house somewhere else.

This.

[Eastcoasting]

Originally Posted by riaelise

There's no way I'd ever overpay. Period. I'll find a house somewhere else.

It's not exactly as simple as that, not all appraisers are created equal.

Some will over value, some will undervalue (especially if they aren't local) some will get it just right.

So for the right house at the right time with an eye towards staying in a house for a long time I can see paying over appraisal if that's what needed to happen to close.

[austin-steve]

Originally Posted by riaelise

There's no way I'd ever overpay. Period. I'll find a house somewhere else.

Define "over pay".

[eirenecat]

I know there have been people paying $10-20K over appraisal in my neighborhood as of last fall when we bought. Like riaelise, I would not do that personally. I think other neighborhoods in NW Austin have been experiencing significant over-appraisal offers.

[austin-steve]

Originally Posted by eirenecat

... Like riaelise, I would not do that personally....

What would you do instead, if you truly needed to buy a house, were fed up with renting, and valued a range of geographic locations experiencing high demand? What is Plan B for that type of buyer?

[tom331]

Most of the appraisals were not a true appraisal. For a true appraisal, the appraiser should not know the purchase price. They should privde the appraisal value after comparing the property with others without know how much the offer is. But, most of the appraisers try to appraise the property value to the offering price these days. My friend just purchased a property for $408K and the appraisal value is also exactly $408K. It is a joke with such an "appraisal".

[10scoachrick]

AND...if all six houses on the street sell for 10% above appraisal, then I reckon we need a new appraisal figurer-outer