As I remain active in today’s market representing buyers and sellers. The recent trend has been buyer’s actually paying more for a home than its appraised value. Inventory has remained low in 2015, so in order to be competitive in offering against other buyers they are forced to offer a higher price for a home they love even though it may not appraise. Example: In March 2015 A property in San Jose was asking $379,000, 6 offers were placed on that property ranging from $375,000-$410,000. The seller agreed to accept one of the offers at $400,000 with no appraisal contingency, that property appraisal came in at $380,000 so the buyer was obligated to bring in the $20,000 difference and closed the sale.
Ultimately, the seller was happy and today just about 2 months later that property would most likely appraise at the $400,000 value, so the buyer got their home and is doing okay too.
As a buyer, Would you pay more for a home than the anticipated appraised value?