Are you thinking about selling your house? Or, maybe you are selling your house!
Have you received an offer on your home? When you listed your home, did you look at what other homes in the area have sold for? This is called a Market Analysis. You might even be looking at comparables.
Lets just say you are at $200,000 and the last home in your area sold at $195,000. You are probably wanting to get just a little bit more, in some cases you might want A LOT more, but you need to be careful. You need to be concerned about appraisal issues.
The more you go above that price, the harder the time the appraiser will have to justify the price that you are asking, EVEN if it is under contract, and EVEN if it has multiple offers. The appraisers will still have a hard time JUSTIFYING what you are getting for based off the last sale.
If you get passed the appraisal, you may still have trouble with the finances, the bankers. They may say “we don’t trust this appraisal, we looked at this, and we don’t feel justified in what they are asking.”
So here is where the problem comes in. You are listed at $199,000. You receive several offers. You get a $210,000 offer. That is $10,000 ABOVE the list price! You get several offers that are right in line with the list price because they understand the appraisal issue.
As you are looking at that $210K offer, they have closing costs in the contract. So, now it is a $210K offer with $6,000 in closing costs which nets it to you at $204,000 offer. Some of you might say well this offer is still $10,000 above asking price. Well, these other offers that came in at list price, do not include closing costs.
You end up taking the $210K offer and you go through the process. About 20-22 days later, the appraisal comes back and it appraises at $199K. Now you are stuck with an appraisal of $199,000 with $6,000 in closing costs that still need to be covered. So you now have been sitting on this offer for 22 days and the buyer cannot buy the house without you covering the closing costs.
You have to be VERY careful when you get closing costs in an offer when. you are the seller. You have to be concerned when taking this offer. Be VERY leery when taking an offer that includes closing costs if your home is listed UNDER $250,000 right now in this market.
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Hi. I am Tommy Davidson, aka GoodTimeTommy #GTT, and I am a real estate and self improvement entrepreneur in Murfreesboro, TN. I have over 14 years of experience in real estate sales and the past 5 years I have started playing up to my level.
I hired a coach and surrounded myself with those who were better than me. I have read over 1,000 hours of sales training and constantly improving myself daily.