This market has been crazy, nobody can argue that. As a seller, there has never been a better time to sell than now. Period. But with the steadily climbing housing market, certain area's appraisals have not been able to keep up. Easily a handful of times this year our closings were held up so we could wait for neighboring homes to sell to up a low appraisal. The banks need to justify what they're lending for and want it to be of equal value. The problem here is as a seller, what good is a $25,000 over asking offer if, at appraisal, it's going to come in short. Here is how you protect yourself from that happening, and truly pick the best, highest offer:
In a buyers market you'd never see this, but buyers right now in certain areas, are waiving appraisal. What that means is in order to beat out the other offers, they offer to waive their right to appraisal contingency. In a normal transaction a buyer makes a fair offer, seller accepts. The appraiser comes out, it appraises, world keeps on moving. But here, waiving the right to only pay what the lender appraises it for (or your offer price), if it under appraises by $40k, the buyer is going to cough that up.
Now, most times you won't see such a huge gap, but let's say you do think the offers you are getting are more than it's value, you can throw out to the would be buyers you would like them to waive the appraisal contingency, or only over let's say your list price. So if your home was listed at $550k, which you might have thought to be the top, you're now looking at offers of $605k and $615k. Ask them to waive the inspection contingency, and the one who agrees to pony up the extra because they love the house, that's your buyer.
Remember, this isn't something you can use in every market, but you sure as heck can right now. And besides, what good is reading our blog if it's not great "right now" info. Right? ;)
See ya next week,
Chris & Nikki