Price is what we pay, Value is what we receive. Lenders have as much to due with Price V Value as buyer and seller. Do we look at a 100% loan to value, the same as an 80% loan. The lender pays out less than the borrower receives in the form of fees, points, discounts etc.

The VA, FHA, Fannie, & Freddie all guarantee loans made with discounts against our appraisals???????????

One good rebuttal you can reach to for those types of misconceptions is that it’s not the lenders responsibility to finance over market value mortgages. That is to say that when there is competition and heated markets, bidding wars, or just plainly higher than normal priced properties, lenders are not obligated to loan more to help one buyer best another buyers offer. Also this helps prohibit straw buyer activity and fraudulent flipping schemes. This may be applicable in a single offer setting. The legitimate mechanisms for rising market value is cash contribution. In Colorado some buyers compete 30 at a time for lower priced units. It is not the lenders responsibility to play favoritism and loan more so one buyer can have the winning offer and first position. A smart agent if seeking aggressive pricing should negotiate a cash over appraised value clause to cover the difference between price and appraised value. Many buyers agents offer this outright, understanding they need an aggressive purchase price offer in order to secure the purchasing opportunity. When buyers put cash down over currently established market value, they set a new high for that particular market segment. When they do this routinely, pricing and value crawls upward one deal at a time. Otherwise if lenders had open wallets and buyers could borrow how ever much they want, the price would accelerate to unsustainable levels without a reasonable limitation imposed by the buyers financial capability to both purchase and repay. If the buyer community at large is getting what they feel is a great deal, they’re willing to pay more, it is those buyers whom provide the necessary market correction to establish a higher market value in that area. “Money talks, 110% ltv loans with no cash down walk.” Ha! Something like that. Numbers. Only in slow moving or brand new markets with nominal sale activity could price actually be the value outright, but even then, there are logical limitations, enter the cost approach.