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I received an offer on my home but it was 30,000.00 under asking price. I countered back with a price that was 6,000.00 under asking price. The people who placed the offer are only financing 1/2 with a down payment of 1/2. My realtor told me that even though they're only asking for 1/2 the money and have excellent credit that the mortgage company may not lend it to them if I'm over priced. Is this true? I've never heard of it before.

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    It may be true, but it's their problem. You need to decide how willing you are to wait for a better offer. – keshlam Aug 1 '15 at 22:15
  • Where are you? This could vary by location. In the Netherlands, for example, an appraisal is required in order to get a mortgage and it is possible there (although highly unlikely) for a mortgage lender to refuse to lend money if the house price is too high relative to the appraised value. – Eric Aug 1 '15 at 22:38
  • Is your realtor trying to talk you into accepting a lower offer? Or is he/she just trying to help you prepare for the chance that the buyers may not be able to close the deal? – Kent A. Aug 1 '15 at 23:57
  • @Eric: Most lenders will want a fair assessment of the value of any collateral. That said, the Dutch situation you describe is a bit unique because it's not tied to the bank's risk on the load, but instead on a fiduciary duty of Dutch banks towards their customers. – MSalters Aug 4 '15 at 8:23
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A mortgage lender will not usually lend more than they could get if they had to repossess the property and sell it to recover their investment (in the U.S. it is generally accepted that 80% of market value is the golden number that makes the mortgage work). That's why an appraisal is required. Even with 50% down, the numbers might not add up if your property is appraised very low (extremely unlikely, though. It's more likely your realtor is inexperienced).

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My realtor told me that even though they're only asking for 1/2 the money and have excellent credit that the mortgage company may not lend it to them if I'm over priced. Is this true? I've never heard of it before.

It is a chance, but it is a red herring to the discussion. Having excellent credit has nothing to do with being eligible for a debt object of a specific size. Just because you have excellent credit, would you get approved for a property of $10,000,000 if you only made $35,000 a year (and had no other net worth)?

But regarding your potential buyers, a chance vs a good chance is different. Your realtor just told you some basic always true lending fact that has nothing to do with your situation.

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even though they're only asking for 1/2 the money and have excellent credit that the mortgage company may not lend it to them if I'm over priced

Yes. If the house's value, as determined by the appraisal, is less than the sale price, the bank will not finance the loan. Appraisals and the appraisal process have become much tighter since the Frannie and Freddie debacle.

This fact is true regardless of amounts or credit history.

Though this is happens somewhat rarely; typically if a seller and buyer agree to a price, this price is a reasonable value -- after all, that is nearly the definition of "market value".

So, yes, it is true (and always true, for any financed purchase), but that shouldn't really affect your decision. If you try to sell for more than the appraisal, you will just lower the price to the appraised amount.

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