Selling Your House May Have to Satisfy Three "Buyers"

There are 3 buyers who need to agree on the value of your home; the buyer the appraiser and the underwriter, particularly if there is no large down payment involved. 

The Buyer  While the seller determines the listing price of their home, the buyer ultimately determines the value of a property.  The buyer must be convinced that the value of the house is reflected in the price and/or terms offered.

Smart sellers will make sure the listing price mirrors what the market will bear.  In a market with a large housing inventory and/or stagnating sale prices, it’s important to make sure that your home is realistically priced.  Get in front of the housing trend.  Every week you wait can cost you money.  When prices trend downward, it doesn’t matter what homes sold for 2 months ago.  Buyers have to see value.

The Appraiser  This is the most important visitor you're going to have come by your house.  If you have to "wow" the buyer to write a contract, then you better "mesmerize" the appraiser. This is the person who is going to take a first stab at confirming that the seller and buyer have come up with a realistic price for the property.

With a contract price of $351,990 you want an appraisal of $351,990 or higher. If the appraisal is high, it has no bearing on the contract. If the price comes too far below, and the buyer doesn't have enough down-payment funds to cover the difference, then the buyer and seller will have to renegotiate who is going to take the financial hit to make the loan work. Is the seller coming down in price, the buyer up in price or are they going to split the difference?  Again, that’s why it’s crucial to price your home correctly.  If the buyer can’t secure a loan for the mortgage amount, it doesn’t matter if the buyer and seller agreed on the price of the home.