How much under appraisal should I pay for a house

Should I Sell My Home Below Appraisal?

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By Ian Johnston
A seller credit to the buyer might bring a higher sale price.

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You have an offer on your home, but it's less than you wanted. Do you hold out for more? Counteroffer? How much do you want or need? Are you being realistic? Are you closing on a new home? Waiting may or may not get you the price you want. So you'll have to decide if the uncertainty of waiting is worth it.

Price In Perspective

When we're talking about housing prices we're often talking about hundreds of thousands of dollars. According to the Huffington Post, the median listed price for homes in San Francisco is one million dollars. If your home is appraised at the average price and you take an offer of $990,000 that's $10,000 out of your pocket right? Actually, it isn't. You never had that money. You had a house that may or may not sell for the appraised value. An appraisal is just an estimate of value. The actual market value of your home is whatever someone will pay for it. While $10,000 may seem like a lot, it's only one percent of your home's value.

Listing Price

There is a strategy to your listing price. Some might say you should list a price higher than you will accept because you expect people will offer less. With such a strategy, the buyer might feel like she is getting a good deal. But this may backfire; if listed too high, a potential buyer might not want to make a lower offer and insult you. People shopping for a home can very quickly compare prices and can even sign up for automatic alerts when a home is listed in their price range. These people may never consider making an offer for your home. By listing below the appraised price you can attract more people who can inspect your home. If they like it, they may make an offer that is higher than your listed price, especially if they know other people are making offers.

Setting a Time

When your house is first listed you may get a flurry of calls asking to see the property and even conditional offers. However, a conditional offer can often easily be withdrawn. These early offers are an attempt to beat the competition with speed and may be lower than you could expect from someone who really wants your property. Why not advertise a set date and time when you will entertain offers? This gives serious buyers a chance to examine your home and consider their offer. With more bidders come a better chance at getting more than you asked for, and possibly even more than your home's appraised value. This isn't a flawless strategy, however.

Know Your Market

Doing your homework and understanding your local market can help you price your home appropriately and sell within a reasonable time frame. Your home's appraised value is a good indicator of how your home might sell compared to a similar property. However, your home's market value may be higher or lower than its appraised value. In a booming market like that of San Francisco at the time of publication, home prices are rising, which may bode well for you. In other markets where sales are slower, a high sale price of a nearby home might give you unrealistic expectations about your home's market value. If many homes are not selling, your market may be over saturated and lowering your asking price could attract a bid.


  • Huffington Post: San Francisco Median Home Price Tops $1 Million
  • Inman News: Should I Sell My Home Below Appraisal

Writer Bio

With an eclectic background, Ian Johnston has written on diverse topics including literature, real estate, executive leadership and mental health. He received an Master of Arts from The University of Western Ontario, and a Master of Education from The University of Ottawa. He lives in Dartmouth, Nova Scotia.

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