What to Do If Your Appraisal Comes in Low in the Middle of a Transaction
Update: 2016-11-21
Description
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If a home appraisal comes in lower than the sales price in the middle of a transaction, what should you do? Here are your three options.
Buying a home? Click here to perform a full home search
Selling a home? Click here for a FREE Home Price Evaluation
Low appraisals can be a real challenge in our market today. Low appraisals have become more common because our home prices have been appreciating quickly over the past several years and there are fewer and fewer comparable properties. It seems that each sale is higher than the last.
So what is an appraisal? It’s a price that a willing buyer and seller will settle on. In reality, a home must be sold to three different groups: the buyer’s agents, the buyers themselves, and the mortgage lenders. The brokers help us find the buyers for your properties, the buyers have to feel that the sales price is justified, and the lenders have to agree on the value because they’re the ones putting up most of the money for the house.
“
If the appraisal comes in low,
you have three options.
”
What happens if your appraisal comes in low in the middle of a transaction? There are three ways to proceed:
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position: relative;
padding-bottom: 56.25%;
height: 0;
overflow: hidden;
max-width: 100%;
height: auto;
}
.embed-container iframe,
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.embed-container embed {
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</style>
<iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/sM4CBULxowA?rel=0" width="560"></iframe>
If a home appraisal comes in lower than the sales price in the middle of a transaction, what should you do? Here are your three options.
Buying a home? Click here to perform a full home search
Selling a home? Click here for a FREE Home Price Evaluation
Low appraisals can be a real challenge in our market today. Low appraisals have become more common because our home prices have been appreciating quickly over the past several years and there are fewer and fewer comparable properties. It seems that each sale is higher than the last.
So what is an appraisal? It’s a price that a willing buyer and seller will settle on. In reality, a home must be sold to three different groups: the buyer’s agents, the buyers themselves, and the mortgage lenders. The brokers help us find the buyers for your properties, the buyers have to feel that the sales price is justified, and the lenders have to agree on the value because they’re the ones putting up most of the money for the house.
“
If the appraisal comes in low,
you have three options.
”
What happens if your appraisal comes in low in the middle of a transaction? There are three ways to proceed:
The buyer can terminate the contract.
The buyer can pay the difference in cash. If the buyer wants to move forward with the transaction, they can pay the difference between the appraised amount and the contract price to proceed.
The seller and the buyer can negotiate. If the seller and the buyer meet somewhere in the middle, the transaction can continue. If the seller still feels that they are getting the value they want out of their house, they may reduce the price to the appraised price in order to keep the transaction moving.
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