Another case came from a woman originally from Tianjin.
She bought a house for $1.08 million, then found that the lender’s appraisal came in at just over $910,000. The gap between the two numbers was well over $100,000.
She complained to a friend that she felt she had fallen into a trap.
For a buyer who has already signed, a gap like this is not just uncomfortable — it can put real pressure on their financing.
When buying, many people care most about whether they can get the house. Only when financing runs into trouble do they discover that there is still a distance between “we got it” and “the money will come through.”
It should be said clearly: a difference between the bank’s appraisal and the purchase price does not, on its own, prove that the house was overpriced or that the agent deceived anyone. Working out the reason means looking at the specific property, the basis of the appraisal, and the circumstances of the deal at the time.
But it is a reminder to buyers: before making an offer, both the basis for the price and the financing risk deserve a serious discussion.
Especially in a bidding war, it is easy for your attention to be pulled along by “what will others offer?” and “will a bit more win it?”
One more raise doesn’t seem like much; another one still seems acceptable. By the time you look back, the total price is further and further from your original budget.
At that point, an agent’s value should be in helping the client keep a steady judgement: what have similar nearby homes actually sold for? How much extra are this home’s strengths really worth? At what price does it go beyond what the client can carry?
One useful question is:
“If the bank’s appraisal doesn’t reach our purchase price, will our financing still work?”
This question is best discussed before signing. Facing an uncomfortable “what if” in advance is usually far easier than fixing things afterwards.
— Ming
