I Offered Above My Home’s Appraised Value to Ensure an Inspection

The Competitive Housing Market and Rising Property Prices

The housing market has undergone significant shifts over the past few years, with rising property prices and increased buyer competition characterizing the landscape. In many metropolitan areas, limited inventory and high demand have driven prices up, leading to bidding wars and a sense of urgency among prospective buyers.

As a prospective buyer navigating these tumultuous waters, I found myself in a position where strategic decisions were necessary to secure a new home. One such decision involved offering above my home’s appraised value to ensure an inspection before finalizing the purchase.

The Appraisal Process and Its Challenges

Typically, when purchasing a home, an appraisal is conducted to determine the property’s fair market value. This value helps the lender decide the amount of money they can safely loan to a buyer. However, in an escalating market, appraisals can sometimes lag behind actual market prices, which poses a challenge for buyers and sellers alike.

This gap between the appraised value and the seller’s asking price often leads to complicated negotiations, and in some cases, deals fall through. To avoid losing out on a desirable property due to a potentially unfavorable appraisal, I took a preemptive approach.

The Decision to Offer Above Appraised Value

After identifying a home that met my criteria, I anticipated that the appraisal might not align with the seller’s asking price, given the current market conditions. To stand out among competing buyers and secure the home, I decided to offer a price above the anticipated appraised value, contingent on successfully passing an inspection.

This strategy served two purposes: It demonstrated my commitment and seriousness as a buyer, and it provided a financial cushion should the appraisal come in lower. Most importantly, it ensured the property would undergo a thorough inspection, which was crucial for my peace of mind.

Why the Inspection Was Non-Negotiable

While offering above the appraised value might seem risky, negotiating this term was essential for me. The inspection would reveal any underlying issues or potential costly repairs that could impact the property’s value and my willingness to proceed with the purchase.

For instance, without an inspection, I could have missed significant problems like structural damage, faulty wiring, or plumbing issues, any of which could have led to substantial future expenses. Knowing the home’s condition upfront was non-negotiable for making an informed investment.

The Seller’s Reaction and Final Negotiations

To my relief, the seller appreciated my approach and agreed to my terms, seeing the inspection as a mutual benefit. This willingness to prioritize transparency over immediate profit reassured me of the seller’s integrity and the property’s value.

Following a successful inspection, which revealed minor issues rather than deal-breaking faults, we moved forward with final negotiations. While it did involve revisiting the initial offer and making some financial adjustments based on the inspection results, both parties were satisfied with the outcome.

Conclusion: A Strategic and Informed Purchase

In hindsight, offering above the appraised value might initially seem counterintuitive, but in a competitive market, it was an effective strategy to secure my desired property. It allowed me to stand out as a buyer and ensured that the home underwent a comprehensive inspection before finalizing the deal.

This experience has underscored the importance of flexibility and strategic thinking when navigating a challenging real estate market. For other prospective buyers, my journey illustrates that sometimes, taking calculated risks and prioritizing thorough inspections can lead to successful and satisfying home purchases.

Spokane Home Inspector