Commonly, a home’s price will be run up in a multiple-bid situation. The seller is delighted at first but will run into problems when the appraiser comes into the house and assesses it at a lower price. We recently had a home that was appraised at $30,000 below the agreed-upon purchase price. How do we handle this kind of situation?
The very first thing is to look to see if there are any mistakes in the appraisal itself. Was some square footage omitted? It happened to us recently. Another time, the appraiser forgot about a garage workshop in the back that had at least $10,000 of value.
If there aren’t any, we go take a look at the comparable sales that the appraiser used to justify their value. If we can find more recent or accurate information, we get that information to the appraiser to justify our protest.
If the appraiser doesn’t budge, the most common course of action is for sellers to take the appraised value and use it as the sale price. However, you have other options. Maybe it’s your dream home and you have a little extra cash, so you can pay the difference in cash. Not everyone can do this, but it’s a good example of opportunities to negotiate after a low appraisal. Oftentimes, the buyer and seller end up both bringing cash to the table to meet in the middle.
Just because you have a low appraisal doesn’t mean you have a deal that’s dead. If you have any questions about appraisal or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.