Sale / Contract price came in lower than Appraisal (Frisco: transplants, sales)

[bhanadi]

Is it okay to put 25k more on a property than it is appraised for. I am talking about a 300k property in East Frisco.

The comps in the neighborhood match the appraisal.

How common is it in Frisco for this kind of a situation? Do we see this ( Appraised for less than the sale price ) more often now-a-days...?

[Beardown91737]

It may cost you something if you don't live there very long. We over-improved our new townhouse, but we like the way it looks now. We had them omit the backsplash, and we put in our own last weekend. It is nicer than the builder's highest upgrade and cost us less than their first tier upgrade.

In Frisco you should continue to have a good market and transplants who are looking for nice upgrades.

[TurtleCreek80]

Originally Posted by bhanadi

Is it okay to put 25k more on a property than it is appraised for. I am talking about a 300k property in East Frisco.

The comps in the neighborhood match the appraisal.

How common is it in Frisco for this kind of a situation? Do we see this ( Appraised for less than the sale price ) more often now-a-days...?

It's pretty common for appraisers to lag the market values, especially when values are increasing 1% per month or so & people are paying over asking.

Was this a multiple offer situation?

[dallas_cowboy]

You will get different answers on this question..... make your decision based on what you feel about the property.

IMO, when we were looking homes last year we ran into various situations where we were outbid by others because someone was willing to pay higher than listed price and comps were clearly saying that list price is correct and appraisal should be around that price as well. But I didn't want a thought when going to bed at every night that I paid $25K more than listed / appraisal price.............. There are people in this market willing to pay higher than what you or appraiser thinks the house is worth. If you don't want to overpay the appraisal price, then you can ask your agent to add a clause to re-negotiate the offer if appraisal comes out lower than the offer price. This will at least give you a peace in your mind.

We eventually found a new construction home where builder was selling at the market price and our house was appraised at our sales price.

[ETex2]

Is the contract price "lower than Appraisal" as stated in the thread title, or higher as you stated in the post?

[bhanadi]

The thread title is incorrect.

[dallas89]

Well the $25k is only about 8% of the sale price. If the property is in a good area, it very well could appreciate to that amount in the near future. Do you have the $25k to put in?

[frenzyrider]

Originally Posted by dallas_cowboy

You will get different answers on this question..... make your decision based on what you feel about the property.

IMO, when we were looking homes last year we ran into various situations where we were outbid by others because someone was willing to pay higher than listed price and comps were clearly saying that list price is correct and appraisal should be around that price as well. But I didn't want a thought when going to bed at every night that I paid $25K more than listed / appraisal price.............. There are people in this market willing to pay higher than what you or appraiser thinks the house is worth. If you don't want to overpay the appraisal price, then you can ask your agent to add a clause to re-negotiate the offer if appraisal comes out lower than the offer price. This will at least give you a peace in your mind.

We eventually found a new construction home where builder was selling at the market price and our house was appraised at our sales price.

While I agree with most of what you said except the bolded one. What do you think is the market price when a builder is selling it and when does it happen that the appraisal comes lower than the builder's sale price. Appraisers find it very difficult to provide comps to a new construction house where no one has lived so they usually go with the average sales price of the other houses that are being sold by the builder in the subdivision. Don't mix new construction price with sales price and appraisal price. There is too much volatility. Market price settles only when a builder leaves the subdivision. It can go higher or lower.

[pistisan]

If you like the home and attached to it, and you are sick of competing against other buyers, and have already submitted multiple offers and no luck, I would say just go for it. Prices going up, the 25K might appreciate in a year or less...and while you are searching for the perfect home prices in Frisco still going up. Let's us know how did you decide at the end?

[angiesu]

We just ran into this with a new construction. Not enough comps. We got an expensive large lot, paid for a wider driveway and garage bump out, not to mention some other not so big things but when it came down to it we think we made good choices and once the neighborhood it built out its a good investment. Our appraisal was $10k lower but its worth it to us. Did not like hearing that of course but from what I've heard that could be a problem with a new build without very many comps. It was only about 2.2% so I guess that is not too bad.