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Thursday, September 8, 2016

What You Can Do if Your Appraisal Comes Back Low


If the home you’re selling doesn’t appraise, is the deal dead? Today I’d like to break down the options you have as a seller in the event of a low appraisal.

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What should you do if the appraisal on the home you’re selling comes back low? Don’t panic; your deal isn’t dead. You’ve got four basic options:

1. Ask the buyer to pay the difference in the sale price and the appraisal price in cash, or lower any concessions previously negotiated in the offer to make up that difference.
2. Meet the buyer somewhere in the middle to try and keep the deal alive, depending on the gap in the difference.
3. Reduce the price to the appraised value. This course of action is most commonly taken by inexperienced agents, and is usually my least favorite option. Unless the buyer is absolutely refusing to negotiate with you, this should be a last resort.
4. Challenge the appraisal. This is my favorite option, and one that only experienced agents will be familiar with. A Realtor or real estate attorney can actually reach out to the appraiser to find out from the appraiser’s perspective why the number came in low. In order to challenge an appraisal, we’ll first have to find out whether the appraisal was done properly and determine if the appraiser missed any features or details of the home.


An experienced Realtor can help you challenge an appraisal.


 

In order to minimize your chances of receiving a low appraisal, you’ll want to take some steps to prepare your home before the appraiser comes out to look at it.

You’ll first want to make a list of all of the upgrades, improvements, and renovations on the home, as well as the cost of each. Give that list to your Realtor so that they can point these out to the appraiser.

Secondly, you’ll want your Realtor to meet the appraiser at the property or, at minimum, send the appraiser comparable sales in the neighborhood before they arrive.

Finally, even though your home is already under contract, you’ll still want to have your home in showroom condition for the appraiser.

If you have any questions about low appraisals or the appraisal process in general, feel free to give me a call or send me an email. I’d be happy to help you!