Q: My husband and I made an offer on our first home. We were bidding against two other offers, so we had to go above asking. Our agent told us what he thought we should offer, but we went in quite a bit below that, and we still got it!

But now, the problem is that we’re dealing with a trust issue. It’s hard for us to just take his advice on things, knowing that if we had offered what he recommended, we would have overpaid for the house.

Also, now I have doubts about the price we did offer — I’m stressed out thinking that we paid too much for the place. I reviewed all the comparable homes I could find, and really thought the house would not appraise for what we agreed to pay for it. But the appraisal just came in at the exact price we paid.

Is there something that our agent could have said or done to convince the appraiser to approve too high of a price? I’ve heard about that sort of thing.

A: With respect to the trust issue, I hear where you’re coming from and acknowledge that your crisis of trust comes from a valid place. However, as the facts of your situation bear out, your agent’s job is to make an educated, reasoned recommendation of an offer price or offer-price range to you.

Agents generally make offer-price recommendations based on the competition you face, what you can afford, any knowledge they have of the sellers’ situation and motivation, and the recent comparable sales data — both the prices similar homes have recently sold for, and the amount or percentage over the asking price they have sold for.

And certainly, almost every buyer’s agent I know will take into account their client’s level of motivation, or desire, to get that particular home.

"Agents generally make offer-price recommendations based on the competition you face, what you can afford, any knowledge they have of the sellers’ situation and motivation, and the recent comparable sales data — both the prices similar homes have recently sold for, and the amount or percentage over the asking price they have sold for."

If it’s a must-have, and there are other offers, the recommendation might be a bit higher. If it’s a home you could take or leave, and getting a great price is a big deal to you, the recommended offer price could be lower.

Your job, on the other hand, is to make the ultimate decision about what price to offer. Ideally, you’ll take all these things into consideration and, then, once you’re within a range that is within the realm of both what you can afford and the fair market value of the home, decide on your final price with a gut-check I call the "no regrets" test:

"If I make this offer and get the place, will I regret it? And, conversely, if I make this offer and don’t get the place, will I wish I’d offered more?"

And it sounds to me like you both did your respective jobs.

Nine-and-a-half times out of 10, I make very, very accurate predictions to my buyers of what their intended homes will sell for, based on the data I’ve just described. But real estate sales prices are really a reflection of the intersections between the buyer’s psyche and finances, the seller’s psyche and finances, and the market data, as represented by an appraisal.

Sometimes buyers simply don’t offer as much as the data predicts, and occasionally, that seller wants or needs to take a lower price. …CONTINUED

In some cases, I might recommend a higher-than-needed asking price to my clients. Unless your agent has a track record of advising you to do things that turn out to be against your best interests, I wouldn’t hold this against him too terribly much.

Now, in terms of your buyer’s remorse, don’t sweat it. Almost every homebuyer in the history of homebuying is gripped with the fear that they’ve overpaid for their home the very moment they hear their offer is accepted.

Overpaying means different things to different people (e.g., paying more than you can afford, paying more than the place will appraise for) — the most commonly dreaded form of overpaying is paying more than you could have gotten the home for.

Well, here’s a reality check: The world in which you might have gotten a lower offer accepted is a hypothetical one. It doesn’t exist. So you’ll never know how much less you could have paid — especially where other offers are involved.

Let’s turn our attention to your concerns that there might have been some collusion between your agent and the appraiser to get the place to appraise so high. While such things used to happen quite frequently, I’d say it’s highly unlikely that your agent influenced the appraiser, especially in today’s market.

Appraisers have been so criticized and their livelihoods so threatened by the finger-pointing at "over-appraised" homes in the aftermath of the subprime mortgage market collapse that they take the new rules mandating impartiality extremely seriously.

Most banks require appraisers to be on their approved "list" of appraisers, and the fear of being caught in any impropriety looms very large in the minds of every appraiser I know. These guys know that getting booted off a bank’s list can be the end of their career. And this is especially so if your loan is an FHA loan and your appraiser is FHA-approved.

Every appraiser and agent knows that the bank’s loan underwriters will scrutinize both the comparable sales and the rationale the appraiser uses to justify his or her opinion of value.

If either is found lacking — especially in the presence of even an appearance of impropriety — both appraiser and agent can be completely barred from working on FHA-insured loans, with disastrous consequences to their business.

In fact, after the rocky start to your purchase, your agent might not have minded having a lower appraisal, if justified, so he could negotiate a price reduction and regain your lost trust. The chances that he intentionally set out to corrupt the appraiser are very, very slim.

It’s more likely that the appraiser simply reviewed the contract, the comparables and the circumstances of the negotiation — including that it was a multiple-offer scenario — and found the purchase price to be supported under the circumstances.

So, let your distrust and fears go — you made an offer, it was accepted, and the home appraised at the purchase price. You acted as an informed, educated and smart homebuyer, and your decisions have proven to be sound thus far.

Pay attention to your inspectors and your contingency or objection period schedule. But so long as you can afford it and the inspections and loan underwriting go smoothly, you’ll be moving in no time.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.


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