If your appraisal comes in low, here are the three steps we take.
What happens if the appraised value doesn’t match the contract price? This is currently a real concern in our market because many listings are receiving multiple offers, prices are bid up, and then the appraisal comes in lower than the contract price. In these situations, here’s what we do:
1. Check for human error. First, we check to see if a simple mistake was made. Appraisers are very busy right now, as everyone is in this industry, so once in a while, an error is made. We’ll double-check their report and ensure there are no typos and nothing got missed.
2. Create a rebuttal. If human error doesn’t apply, we’ll then find all the comparable sold properties in your area and submit them to the lender. They’ll evaluate them, and make any changes to the appraisal report that they can. Keep in mind that this doesn’t always work out, but it’s an opportunity to try to get the appraised value increased.
3. Renegotiate a new price. If we’ve tried the other two options without success, then we’ll renegotiate with the buyer’s agent and come up with an agreeable price for both parties.
In this real estate market, buyers and sellers are aware that prices have been rising fairly rapidly over the last few years. Just be mindful that a low appraisal could be an issue when you sell your home.
If you have more questions regarding low appraisals or anything else real estate-related, feel free to contact us via phone or email. We would love to help you.