Getting a home appraisal before making an offer will help determine how a bank would look at the fair market value of the property.

Q: We are trying to buy a new home and would like to hire a reputable home appraiser to look at the property to get a real sense of what the property is worth.

We have had an agent look at the property and pull up some comps, but the issue is the seller is asking way above what we feel is fair market value (asking price is $750,000).

The price is so high and out of the ballpark that we feel that even if somebody offered that price, banks would turn down the buyers because it wouldn’t come close to appraising out in value.

That said, the house is tough to value because it’s not in a neighborhood and was built and owned by one person since 2001. It is located on a somewhat busy surface street but sits on 1.8 acres, so it doesn’t really feel that busy.

We already made an offer on the home at $500,000, which is what we felt was fair based on our comparable numbers generated by our real estate agent. Unfortunately, the seller rejected our offer and did not counter.

My wife and I continued to look around at other houses, but cannot find anything that will meet our growing family needs. So, now I want to make another offer but would like some kind of price/value opinion to go along with it. I would pay “fair market value” for the property, but I feel like some kind of appraisal professional could offer some more input I’m missing.

What do you think? I read your blog about hiring and get a property appraised before making an offer.

A: Thanks for your email. I do think you would benefit from having a discussion with an appraiser for two reasons.

First, with a home appraisal you’ll be able to determine how a bank would look at the fair market value of the property, which is important if you need a mortgage. Second, with a home appraisal you’ll have some hard data about the true nature of sales in the area to use to bolster your argument when you go back to the seller with a second offer.


Clearly, the owner wants as much money as possible and may have overbuilt on the property in 2001, which would have been like purchasing the property in 2006 or 2007, when prices were sky high. If the owner put $1 million into the property and it declined in value 30 percent, it’s worth roughly $700,000 (in his mind). Perhaps he’s asking $750,000 hoping to get $700,000 and walk away clean.

But if the owner has a mortgage for $700,000, you could understand why an offer for $500,000 would be rejected. Unless the owner is rolling in dough, he’d have to go to the mortgage lender and arrange for a short sale. The owner may have too many assets for a true short sale, and the lenders may simply decline (instead of agreeing) to the sale. That would put the owner in a truly tough spot.

You should try to find out more information about the seller and his circumstances. You could do some digging to try to determine whether he has a mortgage and for how much. This may be public record in your area and that information may even be online with the local recorder of deeds or office that handles document recordings. You should have your agent talk to the seller’s agent about the property and his motivations and timing for sale.

Remember, the seller doesn’t have to sell his house to you – or anyone, unless there is a third party pressuring him to unload this asset. To get what you want, for a price you’re willing to pay, will require some deeper thought and research. And, still, it may be impossible to come to a deal unless you’re willing to pay the seller’s minimum sales price. If that’s the case, then you should know what cash you’ll need above and beyond what a mortgage company will offer to you if you decide to buy it anyway.

But we don’t want you to make a mistake. A mistake would be to dramatically overpay for a property that you wind up selling in a couple of years before prices have recovered. But if you can afford to pay something reasonable to the seller and it isn’t rejected by the seller, and you plan to stay for a significant amount of time, then you should move forward.

Just make sure you go in with your eyes wide open. To find an independent appraiser, you can to the Appraisal Institute ( or the American Society of Appraisers ( or the Appraisal Subcommittee website of the federal government (

Good luck!