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Appraisal concern with offering way over asking

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Texaggie7nine
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10:14a, 10/19/21
So after 6 or so months looking and losing several offers, it seems pretty evident that we are just going to have to bite the bullet and go at least $15k over asking to have a shot at any of the homes we are trying to get here in Houston.

I'm ok with that so long as the appraiser will back us up. It seems appraisal addendums are standard now to get accepted and I don't want to be stuck with having to pay an extra $20k at closing because the appraisal stayed around the asking price. What are you guys seeing with homes that sell for way over asking. Are the appraisals coming in for about what they paid usually?

I noticed a house we lost our bid on yesterday is now relisted for 20k over today, but they told our agent they already accepted an offer yesterday. So are they relisting at the price they sold at so that the appraiser can put that as the listing price?
7nine
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aggiepaintrain
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11:20a, 10/19/21
AG
I don't know about Houston specifically but I would wager to bet that all the accepted offers have appraisal waiver clauses, so be prepared to have to come out of pocket in the event the appraisal is short.
FJB
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TxAG#2011
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11:54a, 10/19/21
The house you lost out on yesterday is now listed again today for +20k?

That's one of those cheap ass fast money people who try to resell during the option period. Pretty brazen to do it like that.
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TresPuertas
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In reply to Texaggie7nine • 11:58a, 10/19/21
AG
Texaggie7nine said:
So after 6 or so months looking and losing several offers, it seems pretty evident that we are just going to have to bite the bullet and go at least $15k over asking to have a shot at any of the homes we are trying to get here in Houston.

I'm ok with that so long as the appraiser will back us up. It seems appraisal addendums are standard now to get accepted and I don't want to be stuck with having to pay an extra $20k at closing because the appraisal stayed around the asking price. What are you guys seeing with homes that sell for way over asking. Are the appraisals coming in for about what they paid usually?

I noticed a house we lost our bid on yesterday is now relisted for 20k over today, but they told our agent they already accepted an offer yesterday. So are they relisting at the price they sold at so that the appraiser can put that as the listing price?
with all due respect its not the appraisers job to "back you up"

They want things to go through and close easily as badly as you do, but if its not there thats on you. Its not your money, it belongs to the lender. If you want the house that much that you're willilng to overpay, it needs to be done with your own money.

Being a buyer right now sucks, but make sure its absolutely the house you have to have and the one you want to spend the rest of your life in. If not, don't overpay.

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Texaggie7nine
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In reply to TresPuertas • 12:04p, 10/19/21
Untuck your panties. No one said it was their job chief.
7nine
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TresPuertas
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In reply to Texaggie7nine • 12:05p, 10/19/21
AG
Texaggie7nine said:
Untuck your panties. No one said it was their job chief.
"I'm ok with that so long as the appraiser will back us up"


-literally you.... earlier
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Texaggie7nine
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In reply to TresPuertas • 12:07p, 10/19/21
"I'm ok with fishing all day so long as the fish are biting."

Guess I just said it's the fish's job to bite my lure.
7nine
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Diggity
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In reply to Texaggie7nine • 12:25p, 10/19/21
AG
there's really no way for anyone to answer your question properly, especially without knowing the particulars.

Even then, it's a crapshoot, so don't write an offer with an appraisal waiver unless you're willing and able to come out of pocket
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Texaggie7nine
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In reply to Diggity • 12:32p, 10/19/21
The main question is simply this:

Quote:
What are you guys seeing with homes that sell for way over asking. Are the appraisals coming in for about what they paid usually?
For those that have dealt with a lot of closings in this past year, where the accepted offer was well over asking, how often are you seeing the appraisals come close to that? In essence the appraiser sees the current value to be roughly the same as what was being paid, in which case they are "backing up" the valuation of the buyer consequently, but not the intended result.

Obviously it's not the appraisers job to just get to the value needed. The question is, how are most appraisers seeing this market. Are they adjusting values sparingly or what?
7nine
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TresPuertas
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In reply to Texaggie7nine • 12:41p, 10/19/21
AG
Texaggie7nine said:
The main question is simply this:

Quote:
What are you guys seeing with homes that sell for way over asking. Are the appraisals coming in for about what they paid usually?
For those that have dealt with a lot of closings in this past year, where the accepted offer was well over asking, how often are you seeing the appraisals come close to that? In essence the appraiser sees the current value to be roughly the same as what was being paid, in which case they are "backing up" the valuation of the buyer consequently, but not the intended result.

Obviously it's not the appraisers job to just get to the value needed. The question is, how are most appraisers seeing this market. Are they adjusting values sparingly or what?
its usually coming in or around asking, unless it was overpriced to begin wiith. A lot of the time people will throw hail mary's out and be way above asking so they're the accepted offer with no intention of paying that much and renegotiating after the appraisal comes back short. After seeing this happen way too often in came the waiver to make people pay the contract price they promised. I'd say all realtors worth their salt have these in there in that situation.

Appraisers are just as good as the data and will use the most relevant and recent information, but remember, they can only use retrospective data and rarely will they adjust for the future if the closings are from the last 30-90 days. Like i said, it sucks to be a buyer right now. I recognize that, but a lot of what I've seen lately is people getting their hair lit on fire about buying a house and not really asking if its the house they really want. Its crazy. Its like the toilet paper frenzy at the beginning of Covid. People just freaked out because everyone else did. This market is like that domino effect.
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Texaggie7nine
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In reply to TresPuertas • 12:49p, 10/19/21
I understand all that as we have been dealing with competing with those buyers and the investors these past 8 or so months of trying to get a house we really want. We are now going to live in Airbnbs until we can find a house to live in. I'm fine with waiting for the right house for us, I'm just wondering how common it has been in the past several months for houses to be appraised over the listing when there are multiple offers well over.
7nine
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cjsag94
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In reply to Texaggie7nine • 2:06p, 10/19/21
AG
I'm not in real estate, but from what I've heard, early on in this spike it was a real issue because the comps were not there to support the rapid rise. As things have settled, I think it's become less of an issue.

I think the challenge answering your question is that it depends if the comp SALES are in line with what you are offering to pay. Listing price is largely irrelevant, only matters what things are actually selling for. So, if you are offering $200/foot where everything is selling for $190/foot.. After being listed for $180.. then you may be disappointed as it appears you are overpaying
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HouseDivided06
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4:09p, 10/19/21
AG
Not much to offer but figured a personal anecdote wouldn't hurt. Started looking in probably late February in Dallas, put in multiple offers, waived appraisal with each offer and all at least $15,000 over asking. Had an offer accepted in March at $30,000 over asking, waived appraisal, and the appraisal came in $7,000 over my purchase price. So worked out in my favor. And since closing in April, the Zestimate on Zillow is $45,000 more than I paid for it. I know it's just an estimate, but still crazy that in 6 months even the estimate has gone up that much.
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Texaggie7nine
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In reply to HouseDivided06 • 4:17p, 10/19/21
Good to hear, thanks.
7nine
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rondis23
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9:45a, 10/20/21
AG
Have a friend run some comps for you off the MLS. They will get you an accurate and up to date price per square foot value in your area. If its near your "15k" over asking price...do it.
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Texaggie7nine
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In reply to rondis23 • 9:54a, 10/20/21
rondis23 said:
Have a friend run some comps for you off the MLS. They will get you an accurate and up to date price per square foot value in your area. If its near your "15k" over asking price...do it.
That's always a good option if you have it. I'm limited to 40k price ranges that HAR gives me on sold homes.
7nine
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Howdy Dammit
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9:57a, 10/20/21
AG
We bought in the Austin MSA earlier this year. We were terrified of the appraisal since we did the waiver. But our appraisal came back 20k over what we paid. Couldn't believe what people had paid for our comps in the past 60 days. Bizarre.
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Ducks4brkfast
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In reply to Texaggie7nine • 10:05a, 10/20/21
AG
Texaggie7nine said:
rondis23 said:
Have a friend run some comps for you off the MLS. They will get you an accurate and up to date price per square foot value in your area. If its near your "15k" over asking price...do it.
That's always a good option if you have it. I'm limited to 40k price ranges that HAR gives me on sold homes.
You don't have a realtor?
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Texaggie7nine
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In reply to Ducks4brkfast • 10:29a, 10/20/21
Ducks4brkfast said:
Texaggie7nine said:
rondis23 said:
Have a friend run some comps for you off the MLS. They will get you an accurate and up to date price per square foot value in your area. If its near your "15k" over asking price...do it.
That's always a good option if you have it. I'm limited to 40k price ranges that HAR gives me on sold homes.
You don't have a realtor?
We do. They also have been looking at comps for us. I just like being more comprehensive.
7nine
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cjsag94
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In reply to Texaggie7nine • 11:14a, 10/20/21
AG
Seems to me the realtor should've pulled actual comp sales before advising you on the offer to make. Did the realtor simply lazily suggest offering $xx,xxx over asking because that's what people do, regardless of fairness of the asking price? Seems much of this angst is rooted in a lack of understanding of current market conditions.

I would expect the realtor to know the answers to these questions as a basic function of their job.
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Texaggie7nine
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In reply to cjsag94 • 11:20a, 10/20/21
So far that is pretty much what has been happening. The offers we have made have been with information from comps and advice from our Realtor. I'm just trying to get as much data as I can as I weight how much we are willing to go over in order to win a bid.
7nine
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The Silverback
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12:47p, 10/20/21
AG
I would absolutely be prepared to have to come out of pocket some additional funds in case the appraisal doesn't come in what you need it to. Some of the appraisers (not all) are lazy and don't put in much effort to support value. And if you waive the appraisal and get to that point in the closing process there really is no turning back. Or if that extra $15-20k is going to be an issue you might simply have to look at a lower priced house so you don't find yourself in that predicament.

Another tip is have your realtor put together their own report on comps and why the house you are buying validates the sales price. When we sold our house last May the buyers agent put together a 20 page report to give to the appraiser so they basically don't have to do anything.
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Year of the Germaphobe
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In reply to Texaggie7nine • 7:59p, 10/20/21
AG
Texaggie7nine said:
The main question is simply this:

Quote:
What are you guys seeing with homes that sell for way over asking. Are the appraisals coming in for about what they paid usually?
For those that have dealt with a lot of closings in this past year, where the accepted offer was well over asking, how often are you seeing the appraisals come close to that? In essence the appraiser sees the current value to be roughly the same as what was being paid, in which case they are "backing up" the valuation of the buyer consequently, but not the intended result.

Obviously it's not the appraisers job to just get to the value needed. The question is, how are most appraisers seeing this market. Are they adjusting values sparingly or what?


Limited inventory is driving it right now where I am. When you have a home sell within two days of being exposed to the market it's hard to argue that it isn't market value; especially when you have no other potential substitute properties available ex: no active listings
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Texker
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10:18p, 10/20/21
AG
Had a relative go through this in D/FW in Spring. Multiple offer scenario on a new listing and they "won" at 25k over ask. Appraisal came in 10k less but they were prepared to pay out of pocket.
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JBLHAG03
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6:27p, 10/21/21
AG
We went 9% over asking with full appraisal waiver. Appraisal matched our offer.

That was after losing 3 without the appraisal waiver.

In DFW.

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Keeper of The Spirits
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10:31p, 10/21/21
AG
Just remember not one appraiser has ever been wrong
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TresPuertas
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In reply to Keeper of The Spirits • 11:32p, 10/21/21
AG
Keeper of The Spirits said:
Just remember not one appraiser has ever been wrong


i understand this sentiment. a lot of appraisers have this attitude, and it's sucks.

i'll tell you that i'm not here to defend egotistical appraisers. i'm not one of them. i honestly don't care. if i'm wrong i get it. you just have to prove if.

i just want to give some insight to how it goes. ALL of the value decisions that are made MUST be backed up by hard data. there is nothing you can do to get around it. most of the arguments against value I get go something like:

"you're wrong" and then an explanation as to why but no specific data is used to back up the argument.

if you REALLY want to prove an appraiser is wrong do it with new comparables and data. if that doesn't work then send me a PM and i'll do what i can to help.

you've got to remember that everything has to be tied to hard data and every report has to be bracketed. there's no getting around it. that's what 2008 ensured. appraisers are constantly reviewed and questioned, and if you can't defend your value with hard data then you run the risk of losing your license.

so if you're 15000 over the highest sale then you better be able to back it up. if you can't you're in trouble
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Shooter McGavin
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In reply to Keeper of The Spirits • 8:34a, 10/22/21
AG
Keeper of The Spirits said:
Just remember not one appraiser has ever been wrong
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Furlock Bones
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9:28a, 10/22/21
AG
Appraisal waiver has been SOP for the last year plus.
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htxag09
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10:20a, 10/22/21
AG
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Texaggie7nine
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In reply to htxag09 • 10:24a, 10/22/21
I don't understand what how much you are putting down has to do with it? If you are putting down 100k and it appraises for 20k under, then you have to come up with 20k on top of the 100k right?
7nine
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htxag09
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In reply to Texaggie7nine • 10:27a, 10/22/21
AG
Maybe that's just where I'm a little ignorant of the process. If you buy a house for $200k and are putting down $40k, you're borrowing $160k. If the appraisal comes in at $190k, $10k under the purchase price, are you good since it's still more than you're borrowing or do you still have to make up the $10k difference.
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Goldie Wilson
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In reply to Texaggie7nine • 10:30a, 10/22/21
Texaggie7nine said:
I don't understand what how much you are putting down has to do with it? If you are putting down 100k and it appraises for 20k under, then you have to come up with 20k on top of the 100k right?
Assuming your down payment is the minimum amount

ETA: for example, if you're originally planning on putting down 45% and the appraisal comes in a little low, then you can just increase the loan in order to finance 60% or 65% (or whatever amount is needed) rather than 55%.
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JJxvi
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10:32a, 10/22/21
AG
I think the 190k will be used to calculate you loan to value ratio instead of 200k which could change the terms of your loan and whether you have to pay mortgage insurance, etc.
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Texaggie7nine
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10:47a, 10/22/21
Looks like I need to email my loan officer to find out.
7nine
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