If our home under appraised by 25k, is the listing agent at fault?

UPDATED: Oct 1, 2022

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If our home under appraised by 25k, is the listing agent at fault?

Our realtor suggested a list price of 310k to start after doing a comp analysis. My husband is thinking that we should be on the high side because of our oversized 2 car garage with a bathroom asked about 315k. She

said we could try and see what happens. So we signed a listing agreement for 315k. We had a full price offer 3 days later. Fast forward to the appraisal. It under appraised at 290k. That’s a 25k difference. New Link Destination
us this is huge. Now we are short our 20% down payment on the house we are buying. We were also going to use some of the proceeds to pay off our car in order to keep our ratios in our comfort zone. I feel like we were misrepresented. If we went with her price we would be in the same boat at 20k short. That’s better but still bad. Why wouldn’t she advise against listing at 315k? Isn’t part of her purpose to guide us and give expert

advice when choosing a price for our home? I can understand 5k, that happens often, even 10k but 20-25k? I feel like she is partly to blame and therefore should come off some of her commission to help make this work out. I could be thinking with my heart rather than my head due to the heartache and stress this value issue has caused us less than 2 weeks to closing, however I can’t stand the fact that she is making over 9k for sticking a post in our yard and we are losing 25k.

Asked on December 5, 2018 under Real Estate Law, Maryland


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Maybe she is at fault in a common, everyday sense of that word, but she is not legally at fault--or more properly, is not liable or responsible. The realtor does not guaranty the price you will get; gives you advice, but did not compel you to take it (you ultimately decide what to list for). She has no legal accountabilty for the price the home sells at or appraises at.
Moreover, her job is to price the house according to the market, not according to the lender's appraiser. In that regard, she did a good job, since she suggested $310k and it sold for $315k--someone provably and actually paid at least $310k for the home. Her estimate, just a bit short of the offer you received, was pretty close to spot on, showing that the gauged the market correctly.
Finally, the $25k difference between selling price and appraisal is not actually that large as a percentage: $25k off a $315k price is a difference of not-quite 8%, whereas plus or minus 10% is considered within the normal band for something as inherently subjective as home pricing.

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