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A new trend: Paying above appraised price. Have you seen this also on a Macomb County purchase?

September 12th, 2013 · No Comments · Appraisals in Macomb County MI, Searching homes for sale in Macomb County, tips for home buyers

I’ve neglected this blog much too long!  My only excuse is that I have been so busy that I haven’t had time (or energy) to write and keep up with it.    Things are slowing down a bit now that we’re at the end of the “summer rush” and I can finally put in to words some of the things that I’ve experienced over the last few months while helping buyers purchase their homes.

One thing stands out amongst all the madness of multiple offers – not enough homes on the market:   Hearing “Will your buyer pay more than the appraised price?” from the sellers agent.

I’m not kidding.   I’ve heard it from 3 sellers agents while they and their sellers were reviewing offers to purchase from my buyer clients.

Here is the scenario:    Buyer finds “THE” home and puts an offer to purchase in writing.   Each time there are multiple offers on the property, and my buyers are given comparable sales to help them make an educated decision as to what is fair market value for the home.

Each buyer has come in strong with their offers.  (All of them at asking price or above asking price if the comparable sales are higher)

Each listing/sellers agent has asked:  “If the house doesn’t appraise, will your buyer pay the difference between the sales price and the appraised price?”

Each time my buyer has said NO.   Smart buyers.    We’ve always talked about this scenario when the question is asked and what the outcome could be.    For example:  Buyer offers $180,000, seller accepts offer.  Appraiser values the home at $162,000.   That is a difference of $18,000.  If the buyer had agreed, in writing, to pay the difference that buyer would have to bring $18,000 more to closing.  Certainly not something most buyers can do, nor should do.

Most appraisals are coming back in close to asking price, or above asking price.  The appraisers are finally starting to see the increase in values in Macomb County as well as the pent up buyer demand.  However, there have been times when an appraiser sees things differently than a buyer, seller and both agents and comes in much lower than the purchase offer price.  In these instances there isn’t much than can be done unless we can find errors in the appraisal, and then appeal it.   To put in writing in a legally binding contract that a buyer will pay for the difference in an appraisers value and the purchase amount is not something a buyer should consider lightly.

I’ve only had one instance in my 16 years of representing home buyers that the buyer client paid more than the appraised price.  There were specific reasons this buyer did so, and the sellers not budging off the purchase price didn’t help matters.  Because the house was so “specific” to my buyers and nothing had come on the market in over a year like this home, the buyers bit the bullet/wallet and paid over the appraised price.

It’s been a crazy couple of months out there!

Kris Wales – a partner for your real estate needs in Macomb County MI
Contact me at 586-536-5453
Want to search for Macomb County homes?

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Important copyright information: All photos were taken by Kris Wales. Do not copy and use photos for your own use, whether it be for personal or commercial purpose. All articles were written by Kris Wales. Once again, do not copy and use for your own purposes. Important disclaimer: Views expressed on the blog by the author and commenters do not express the views of Keller Williams Realty. All information contained is deemed to be reliable at the time of posting but not guaranteed.