ATTN: Realtors - Price your homes correctly... - Zillow Real Estate ...

And buyer's agents better be even doubly careful. For instance, many bank owned properties are going on the market at lower than market value prices. Then they have multiple bidders. At least one bank is now including a caveat in the contract that if the appraisal is lower than the sale price, they will NOT renegotiate. So if the buyer happens to offer more than the appraiser says it is worth, they have the choice of paying the extra out of pocket or losing the contract.?

The problem is that when they sign the contract saying they will pay the difference, there is no way to know what that amount might be. If the buyer is trying to bid the most the house is worth to get the contract, they are going to go OVER more times than not. A minor 3% difference on a $300,000 is an extra $9,000 out of pocket.,..or start over and forfeit the hundreds if not thousands you have invested in inspections and appraisal (my personal inspection costs came in around $1,500).

I understand why the banks are implementing this policy, to keep people from overbidding just to get the house and then using the appraisal to renegotiate. However, I feel if they are going to do that, they should have an FHA (or somehow written in stone) appraisal at the beginning. Then if people want to overbid, they know how much has to come out of pocket, as HUDSTORE does it.?

But alas, that would be entirely transparent and fair...

Source: http://www.zillow.com/advice-thread/ATTN-Realtors-Price-your-homes-correctly/465594/

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