What you can do to attract high offers from buyers & how to manage a house appraisal lower than the offer price. Get tips from the experts on how to sell your house above market value.
What Is Fair Market Value?
Some sellers struggle emotionally with how to value a home for sale. If you’re selling a home you love, where you have a lot of emotional investment in the space, or where you’ve invested a lot financially to upgrade the space, recognizing the difference between what the home is worth to you vs. its current market value is highly important to your success as a seller. That way, you’ll be able to strike a balance between the literal market value of the home (based on its features, location, condition, and the state of the local real estate market) and your desired sale price. That said, it is possible to sell a house above market value (at least a little bit) with the right strategy.
How To Sell A House Above Market Value
There are good and bad ways to sell a house above market value. The worst way is to intentionally overprice the property (though that sometimes works to get a full-market offer from a buyer looking for a discount). Yet choosing to value a house for sale above the actual market value of the property can be effective if you find the right (cash) buyer who is willing to knowingly overpay. Whether you over-, under-, or competitively value a home for sale, the most guaranteed way to sell a house above market value is to court cash-only buyers, since their ability to follow through on an offer isn’t tied to the property’s ability to appraise above market.
Instead, many industry experts recommend pursuing a sales strategy where you first figure out how to value the house for sale so that it is highly competitive. Then aggressively court multiple buyers to trigger a bidding war that drives the final sales price up above market value.
What To Do About A House Appraisal Lower Than The Offer You Want To Accept
Appraisals are necessary when buyers need a home loan to afford the property, which is why courting cash buyers is an ideal way to sell a house above market value.
Low appraisals happen when the buyer’s offer is above market value, and they matter because a lender will not approve a loan in an amount greater than they believe a property is worth. The most common resolution for a house appraisal lower than the offer is to establish in the contract that the buyer will make up the difference (the amount between the appraised value and the total offer) in cash. In situations where the buyer doesn’t have the cash-on-hand, sellers can take out a second mortgage in the amount of the difference that the buyer will then be responsible for paying back incrementally. In either case, it is still possible to sell a house above market value and a house appraisal lower than the offer doesn’t have to kill the deal — it just becomes a matter of figuring out how to account for the overage not covered by the buyer’s loan.
Are you interested in getting top dollar for selling your home? Contact us today and our team of experts will help you out.
