Advice on Appraisals

[Matthew Conner]

My wife and I are looking to buy a house, and as anyone looking knows the market is pretty tough. We are working with an agent. Ignoring other concerns we have had about him, he told us something regarding appraisals and I am looking to see if it is correct.

We found a house listed for 340k. It had been on the market for >90 days. Purchased in 2015 for 206k. It had minor cosmetic updates since the sellers purchased it (resurface kitchen cabinets, new flooring, painted some flooring, new paint, new hvac) is pretty much it.

Based on looking at what had sold and is selling in the area, I felt it was really worth around 265k, but we realized that would never go and were willing to pay more based on our need. We offered 295k.

They countered at 325k. I didn't want to go any higher as I felt I was already offering a premium price. My agent was suggesting 310k and I was uncomfortable going that high. I was thinking that if I am actually right and its worth less, it might not be a problem if it actually appraises for less I could use that to negotiate. My agent said that it didn't matter it would appraise for whatever the agreed purchase price was and the deal would stop if it wasn't 310k. I said I'd offer 300k and they didn't take it.

Regardless of whether I am right about the real value, is what the agent said true? Would it probably just appraise for the purchase price if we offered 310k?

Any help is appreciated!

[Steve Morris]

1) Your agent is wrong.  He might mean that an appraiser would say Y/N to the contract price, but appraiser are not supposed to use an offer (only closed sales) to determine value AND

2) Make sure your broker (if you still want them) puts in a clause: Property must sell at appraisal or less.