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An appraisal is literally one person's opinion of the sales price. I've had to remind numerous clients, both sellers and buyers, of this recently. It does obviously have some bearing on the transaction and most of the time it is not an issue; but it has so much bearing on people's emotions that the fact that it is literally one person's opinion of the price needs to be reminded at times.
And a listing and list price are just a solicitation for offers.
An appraisal is literally one person's opinion of the sales price. I've had to remind numerous clients, both sellers and buyers, of this recently. It does obviously have some bearing on the transaction and most of the time it is not an issue; but it has so much bearing on people's emotions that the fact that it is literally one person's opinion of the price needs to be reminded at times.
Unfortunately when a mortgage loan is involved that "one person's opinion of the price" can create a problem. Especially when a buyer has agreed to pay more for a home than the appraiser thinks the house is worth! Add in an appraiser that gives no value to a fence or a 1 year old wooden shed and that "opinion" becomes an issue! Especially when the house 2 doors' down is the same floor plan of the subject house and yet, the appraiser didn't use that as a comp!
Yup, one person's opinion and yet, that is the only opinion the bank/lender counts!
Just closed one in Woodcroft.
Comps told us in March to go at $255,000. A bit later, we said, Eh.. $260,000.
Time to list... What the heck? We went at $275,000.
7 offers in 36 hours. All over list price. Only one wasn't workable, as it had a contingency to sell a condo that wasn't on the market.
$275,000 list price. $287,000 sale price, and that wasn't the highest offer. Sellers contributed $1500 to buyer closing costs after inspections. No repairs. 2 week seller rent back for $1.00. I paid the sellers' rent in cash.
Not a single agent was surprised that their client didn't have the successful offer. Some have written 4 or 5 good offers for clients without succeeding.
Craziness. 3 or 4 offers offered to pay regardless of appraisal value. I.e., all an appraisal does is give the bank a figure against which they will lend.
After that, it is up to buyers to decide how badly they want the house, and sellers to decide how badly they want to sell.
Buyers:
1. North Raleigh.
House listed at $585,000. Buyer asked what it would take. I said, "Whatever hurts a bit. $610,000?" Buyer wrote $605,000, clean offer. 20% down. $7500 DD Fee.
Multiple offers.
Buyer didn't get it.
House sold for $605,000. It hurt. They wish they had offered $610,000.
2. North Raleigh.
Another buyer.
House listed at $585,000. Buyer wrote at $595,500. Contingent on selling. VA loan. 2 strikes, unfortunately.
Multiple offers. Didn't get it. I expect it went off over $600,000.
Getting hung up on appraisals in this market is a good way to not buy. Really, if you are bound by comps or believe that the list price is a fixed price and you see a good property, it can be painful when someone steps up and swipes it.
It really hurts folks working on a shoestring who just don't have an extra few percent to throw in to get the deal.
Last edited by MikeJaquish; 07-15-2020 at 04:20 PM..
Just closed one in Woodcroft.
Comps told us in March to go at $255,000. A bit later, we said, Eh.. $260,000.
Time to list... What the heck? We went at $275,000.
7 offers in 36 hours. All over list price. Only one wasn't workable, as it had a contingency to sell a condo that wasn't on the market.
$275,000 list price. $287,000 sale price, and that wasn't the highest offer. Sellers contributed $1500 to buyer closing costs after inspections. No repairs. 2 week seller rent back for $1.00. I paid the sellers' rent in cash.
Not a single agent was surprised that their client didn't have the successful offer. Some have written 4 or 5 good offers for clients without succeeding.
Craziness. 3 or 4 offers offered to pay regardless of appraisal value. I.e., all an appraisal does is give the bank a figure against which they will lend.
After that, it is up to buyers to decide how badly they want the house, and sellers to decide how badly they want to sell.
Buyers:
1. North Raleigh.
House listed at $585,000. Buyer asked what it would take. I said, "Whatever hurts a bit. $610,000?" Buyer wrote $605,000, clean offer. 20% down. $7500 DD Fee.
Multiple offers.
Buyer didn't get it.
House sold for $605,000. It hurt. They wish they had offered $610,000.
2. North Raleigh.
Another buyer.
House listed at $585,000. Buyer wrote at $595,500. Contingent on selling. VA loan. 2 strikes, unfortunately.
Multiple offers. Didn't get it. I expect it went off over $600,000.
Getting hung up on appraisals in this market is a good way to not buy. Really, if you are bound by comps or believe that the list price is a fixed price and you see a good property, it can be painful when someone steps up and swipes it.
It really hurts folks working on a shoestring who just don't have an extra few percent to throw in to get the deal.
Was asked by one of my cash buyers if we should bother seeing that Woodcroft listing of yours because he was looking to "not pay over list price" because he didn't believe in that....I didn't even take him to see it
We closed Monday on a great 70s brick ranch in nearby Woodberry Forest; we got a little off list price for repairs after going under contract at list price. This was after few losses where he realized "Cash is King" is not nearly the effect he thought it had...especially in homes in Woodcroft or assigned to Creekside Elementary.
Last edited by TarHeelNick; 07-15-2020 at 05:41 PM..
Our buyers came in from California and hit the house the way they do there: above asking, with a large DD. The other two offers that day were less, and we went with the buyers even though they had a house to sell; they already had multiple offers.
The one guy who wanted proof of where the town drainage pipe went (when we had the survey out for examination in the house) - we didn't even consider his offer since he seemed like a PITA.
So, in a pandemic in the 27519 zip code, we have close to 30 showings and 3 offers in 3 days.
Just closed one in Woodcroft.
Comps told us in March to go at $255,000. A bit later, we said, Eh.. $260,000.
Time to list... What the heck? We went at $275,000.
7 offers in 36 hours. All over list price. Only one wasn't workable, as it had a contingency to sell a condo that wasn't on the market.
$275,000 list price. $287,000 sale price, and that wasn't the highest offer. Sellers contributed $1500 to buyer closing costs after inspections. No repairs. 2 week seller rent back for $1.00. I paid the sellers' rent in cash.
Not a single agent was surprised that their client didn't have the successful offer. Some have written 4 or 5 good offers for clients without succeeding.
Craziness. 3 or 4 offers offered to pay regardless of appraisal value. I.e., all an appraisal does is give the bank a figure against which they will lend.
After that, it is up to buyers to decide how badly they want the house, and sellers to decide how badly they want to sell.
Buyers:
1. North Raleigh.
House listed at $585,000. Buyer asked what it would take. I said, "Whatever hurts a bit. $610,000?" Buyer wrote $605,000, clean offer. 20% down. $7500 DD Fee.
Multiple offers.
Buyer didn't get it.
House sold for $605,000. It hurt. They wish they had offered $610,000.
2. North Raleigh.
Another buyer.
House listed at $585,000. Buyer wrote at $595,500. Contingent on selling. VA loan. 2 strikes, unfortunately.
Multiple offers. Didn't get it. I expect it went off over $600,000.
Getting hung up on appraisals in this market is a good way to not buy. Really, if you are bound by comps or believe that the list price is a fixed price and you see a good property, it can be painful when someone steps up and swipes it.
It really hurts folks working on a shoestring who just don't have an extra few percent to throw in to get the deal.
In the words of the immortal Frank Barone in Everybody Loves Raymond, "Holy crap!" Man, if these stories aren't the definitive ones describing the Triangle real estate market this summer, I don't know what ones are. MikeJaquish, I tip my hat to you.
I and others may have said it before, but it bears repeating: For many of us being cooped up in our residences for months now, we're noticing even more what we don't like about them. I know that if I was still in my condo I sold 3 1/2 years ago, I'd have gone crazy without having the detached living space, lawn and personal driveway that I have in my current single-family home. The additional cost in upkeep is vastly outweighed by the peace of mind and relaxation I've gained in not having neighbors directly adjacent to me and fighting for limited parking space and recreational areas. And with no big signs of new affordable single-family construction occurring on the horizon, it's going to be a sellers market easily the rest of the year and definitely for a good chunk of 2021, especially given the uncertainty of when the pandemic will end.
Was asked by one of my cash buyers if we should bother seeing that Woodcroft listing of yours because he was looking to "not pay over list price" because he didn't believe in that....I didn't even take him to see it
We closed Monday on a great 70s brick ranch in nearby Woodberry Forest; we got a little off list price for repairs after going under contract at list price. This was after few losses where he realized "Cash is King" is not nearly the effect he thought it had...especially in homes in Woodcroft or assigned to Creekside Elementary.
My road herndon was rezoned to parkwood womp womp however the new school is coming on Scott king 2023ish
Do you think from my house in fairfield where you can walk to the new school it would give a pop to the sale price?
In the words of the immortal Frank Barone in Everybody Loves Raymond, "Holy crap!" Man, if these stories aren't the definitive ones describing the Triangle real estate market this summer, I don't know what ones are. MikeJaquish, I tip my hat to you.
I and others may have said it before, but it bears repeating: For many of us being cooped up in our residences for months now, we're noticing even more what we don't like about them. I know that if I was still in my condo I sold 3 1/2 years ago, I'd have gone crazy without having the detached living space, lawn and personal driveway that I have in my current single-family home. The additional cost in upkeep is vastly outweighed by the peace of mind and relaxation I've gained in not having neighbors directly adjacent to me and fighting for limited parking space and recreational areas. And with no big signs of new affordable single-family construction occurring on the horizon, it's going to be a sellers market easily the rest of the year and definitely for a good chunk of 2021, especially given the uncertainty of when the pandemic will end.
Me....this is me....
I am incredibly grateful to have had the opportunity to buy the condo I did for how much I did when I did about 4 years ago. But even though it is just me and the pup living here; I am dying to get into a SFH not just for a little more space; but mostly for the same reasons you've mentioned here.
There have been quite a few that have come on the market this past couple months that have caught my eye and for which I have contemplating offering on myself.....but going up against my own clients in this market I can't do. Plus my 2020 tax return will garner me a much stronger pre-approval than my 2019 tax return could.
I am incredibly grateful to have had the opportunity to buy the condo I did for how much I did when I did about 4 years ago. But even though it is just me and the pup living here; I am dying to get into a SFH not just for a little more space; but mostly for the same reasons you've mentioned here.
There have been quite a few that have come on the market this past couple months that have caught my eye and for which I have contemplating offering on myself.....but going up against my own clients in this market I can't do. Plus my 2020 tax return will garner me a much stronger pre-approval than my 2019 tax return could.
Just gotta make it to January.
Unless we see more federal stimulus, the wheels are gonna start falling off the bus here by wintertime.
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