Currently, my spouse and I are renting an apartment. I found a home that is unoccupied by the owner that has an asking price of $148,000, but I know from comps that similar homes sold recently for about $133,000 or so. We offered $138.5k but the seller declined. afterwards my realtor sent over a list of comps which the selling agent did not disagree with. From the sounds of things the seller will sell between $145k-149k. 

I think the seller is being a bit irrational and we are we are considering walking. Our realtor suggested that we should offer $145k, and because it is contingent on the bank's appraisal, we will not be paying in excess of market value. I realize banks are more careful now post-bubble but I have done a bit of research and it appears that banks uncommonly appraise homes for less than what they sell for, and usually above. I also do not like that appraisers SEE the amount we want to buy the home for--just how could that not bias the appraiser. 

Also, because we are first time home buyers and only putting down 3-5%, the agent says that the buyer might come down if it appraises for less than it is worth. I do not like the idea of using a bank appraisal as a bargaining chip, and again I have some questions about their accuracy. 

There are not a lot of alternatives on the market in the area we want to be in that we also like; the only other alternative at this point, if we do not get this home, is to rent for 3-6 months to see if the inventory improves. 

Anyways, I am interested in your thoughts. What do you think of the realtor's advice? Is the bank's appraisal accurate, and is it a good idea to use it as a bargaining chip?