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Not sure whether this should go here or the Los Angeles forum, but we're currently house-hunting in the valley and I have a question: are houses actually appraising for their selling prices?
You're standard house is going for, oh, something like $100k-$150k over asking price. And everyone seems to be waiving their appraisal contingencies.
I run everything we're eyeing through the online automated value estimators, but things aren't adding up anymore. For example: there's a place listed for $900,000 right now and our realtor wants us to offer over $1M. "Don't worry," she says, "it will appraise for that."
But the online estimators all have it near $895,000.
What gives here? Are appraisers just rubber-stamping the purchase prices?
What gives here? Are appraisers just rubber-stamping the purchase prices?
No, but many transactions are cash or nontraditional financing, and/or don't have appraisal contingencies. That said, properties are appraising strong from what I've seen. Good luck.
Not sure whether this should go here or the Los Angeles forum, but we're currently house-hunting in the valley and I have a question: are houses actually appraising for their selling prices?
You're standard house is going for, oh, something like $100k-$150k over asking price. And everyone seems to be waiving their appraisal contingencies.
I run everything we're eyeing through the online automated value estimators, but things aren't adding up anymore. For example: there's a place listed for $900,000 right now and our realtor wants us to offer over $1M. "Don't worry," she says, "it will appraise for that."
But the online estimators all have it near $895,000.
What gives here? Are appraisers just rubber-stamping the purchase prices?
Appraisers go by $/sq. ft., and local market trends. You can probably do your own due diligence using Zillow/ Redfin on "recently sold homes" to see if your purchase will appraised. Online estimator can only go with HISTORIC DATA but can not include the upward trend.
Recently I bought a home offering 10% over asking. The Seller agent even included a contingency that if the house is not appraised at the offered price, I would pay the difference. I agreed. This is also a rural property so not many homes for comparison. ALL the online estimators listed it below the offered price as well.
The appraisal came back just slightly above the offered price.
Appraisers go by $/sq. ft., and local market trends. You can probably do your own due diligence using Zillow/ Redfin on "recently sold homes" to see if your purchase will appraised. Online estimator can only go with HISTORIC DATA but can not include the upward trend.
Recently I bought a home offering 10% over asking. The Seller agent even included a contingency that if the house is not appraised at the offered price, I would pay the difference. I agreed. This is also a rural property so not many homes for comparison. ALL the online estimators listed it below the offered price as well.
The appraisal came back just slightly above the offered price.
Appraisers don't use $/sf and using sold homes on Zillow/Redfin only provides a small piece of a very large picture.
What gives here? Are appraisers just rubber-stamping the purchase prices?
No. Realtors are optinistic and are thinking in terms of wishful thinking. While there ARE appraisers out there that would do that, but they won't be in business much longer.
And those automatic valuations methods you see on line line are inaccurate because they are based on an entire neighborhood with no regard to condition and other attributions.
I have had more than 8 appraisals done on my properties. I know how appraisal works.
They don't work that way.
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