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I'm going to disagree with you on the amount of influence this comp will have on the appraisal report. I'm not an appraiser nor do I play one on TV but my understanding is that USPAP requires appraisers to use comps no older than 12 months and if they're using a comp older than 6 months they have to justify it. An appraiser's job and duty is to assess the market value of the house and using a comp older than 6 months in a fast rising market is going to be hard to justify.
Also, markets go up and they go down. No one has a crystal ball and can say where the market will be when the OP is ready to sell and trying to time the market is a fool's errand. The OP may wait a year and get a similar house at a lower price and then sell in a TERRIBLE buyer's market and end up losing money just as easily as they could buy now and end up selling in another strong seller's market and make money. If you buy a home, be prepared as best as you can be for whatever the market is going to do and that's all you really can do. What the market is going to do between when the OP buys and the OP sells is really just noise to them and it doesn't matter.
If there are other recent comps that justify this price and it sounds like there are why should the OP walk away? Again, you have no idea what the market is going to be like when the OP sells or even what it will be like in a year. Definitely, the market is up right now. Will up be up more next year or down? Neither of us know. If it's up more next year OP is going to regret not buying now.
The vast majority of my clients that bought in 2007 have made hundreds of thousands of dollars in equity in their homes. I even had one client who bought in 2007 and sold in 2008 and I sold their home for more than they paid for it.
You really have no idea about the OP's local market and you certainly have no way to predict what the market nationally or in the OP's local area will do. So, IMO your doom and gloom posts are not doing them a favor.
My hope is that they are working with an honest and knowledgeable and of course LOCAL real estate agent who can guide them on these issues.
I really appreciate the perspective (everyone's perspective honestly).
Happy to say I am working with a local, who is well regarded. Obviously, I am more prone to worry, so tend to over think things. During our inspection today, I sat down and looked really hard at the comps to get a better feeling of what's out there, and what we may be compared to. I had found a few of comps that she did, and she had others.. at the end of it, I felt more confident that we would make appraisal, and with the inspection passing with flying colors, I'm ready to go full bore.
For my feelings.. it's the home I have been looking for, and I feel like in this market it's fair. When I see homes list at 280 then contract for 330, I just shake my head. Yes, this home is priced higher than years ago, but I know that's the nature of the market. I feel comfortable with the cost, and don't think I am going to regret this down the line.
Anyway, we are pressing on..Hopefully the comps land as we strategies them (and who know, a few more may squeak in..), and we will be set. Fingers crossed
This time round, no.. no bidding war. We got in at list price, by giving up appraisal.
Emotions? Sure, frustrations of trying to provide a home for the last 10 months and failing. But no, I ddint fall into the bidding trap. No offer that I have made was crazy, or above list.. part of why I kept losing them.
Again, looking at comps (two of which were ony my self list in the OP), I am more confident (my realtor was confident from the get go)
It's obvious you let your emotions get in the way.
If you waived the appraisal contingency, you probably also fell for the "bidding war" tactic and way overpaid for the house.
Appraisals are not made on emotions. They are made on facts and the opinion of a real estate professional.
Your "offer" was obviously made on emotions.
I have a strong feeling the two numbers will be far apart.
I would be worried, probably very worried.
That's pretty harsh, and unfounded for the most part as you don't have all the details.
I just bought a house in this hyper-inflated market, offered over the ask, and was asked to remove the appraisal contingency from the contract, which I did. It was not a matter of emotion. We do't let emotion get involved in the buying or selling of real estate - it's a commodity and nothing else. We wanted the house and are prepared to pay additional should the appraisal not come in where we expect.
I fully expect the comps to be at or near my purchase price. If it's off a bit, I'll bite the bullet and pay the difference. Am I concerned about where the appraisal will come in? Sure. However, the appraiser is a local, knows the market well, and has a good relationship with my agent and others in the community. So much so that they have been known to reach out to the agents for additional comps or supporting documentation when the numbers don't quite line up where expected.
To the OP:
Pay no heed to the naysayers. It's understandable that you're concerned, but with the market the way it is you're likely to come out just fine. Sit back and chill until you see the numbers - then you can stress if necessary.
Good luck, I'm in a similar boat and will know the outcome in the next few days.
No need to kill anyone. I'll give you a straight answer/opinion. YES, you should walk away if there is ANY gap between the appraisal and what your contract amount is. I believe that you have been caught up in the buying frenzy and this has interfered with your ability to see the big picture. It's better to experience the temporary disappointment of not getting a house today than it is to experience the long term regret/remorse of paying way too much for a house and having to live with that situation for the next 10+ years.
ANY gap? Really?
So if the OP put down an earnest money deposit of $10k and the appraisal comes back with a $7k gap between the purchase price and the appraised price, your recommendation would be for the OP to walk away and take the $10k loss?
So the question remains... at the end of the day, should I be mentally prepared to walk away due to a huge gap? I would kill for a straight answer; I hate how there is so much uncertainty like this.. it should be straightforward and simple
So if the OP put down an earnest money deposit of $10k and the appraisal comes back with a $7k gap between the purchase price and the appraised price, your recommendation would be for the OP to walk away and take the $10k loss?
Location: In a city within a state where politicians come to get their PHDs in Corruption
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OP,
It's obvious you have buyer’s remorse before you even closed on the house.
What does that say to you?
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