I’ve been a real estate agent and broker in New Jersey for most of my adult life. One statement I’ve heard again and again when getting ready to list someone’s home is “my neighbor is asking “x” dollars for his home and mine is better so I want more than that”. While I understand what the seller may be thinking, the reality is that if a buyer is getting a mortgage, the home must appraise for the sales price.
An appraiser does not use the “asking” price of another home to arrive at the value of the appraisal.. Generally speaking, appraisers use similar homes, in close proximity to the subject property that have actually closed title in the prior 3-4 months. In certain instances, with a lack of good quality comparable sales, an appraiser may look back 6 months or look at a home that is under contract but has not yet closed title. However this is not their preferred method.
As a seller, you should carefully look at the comparable sales (or your agent should show you) when determining asking price. It will save you time and emotional stress being confident that your sale will appraise and actually close title. No one wants to sign contracts, start making plans to move, hire attorneys/title companies etc, only to find out halfway through the transaction that there is an appraisal issue.
Remember, the appraised value must come in at the “sales price”, not the mortgage amount. So be realistic and hopefully have smooth sailing in your transaction.