Home Appraisals: What You Need to Know

What do you do if the appraisal on the house you’re buying comes in lower than what you’re paying? I’m Jessica with realm real estate here to break down what all this means. So to obtain buyer financing, part of the process is for your lender to order an appraisal on the property. An appraisal is an unbiased estimate or opinion of thefair market value of a property and is performed by a licensed appraiser. The appraisal isdone through an inspection of the property and by looking at recently sold comparable homes in the area~ based on condition, location, upgrades, etc.Now there are times however when an appraisal comes in lower than the accepted offer price. And as a buyer, this can be frustrating and disappointing because it could mean you won’t be approved for your full loan amount. But don’t panic, there are options available to you as a buyer, like appealing the appraisal. If you and your agent believe the appraiser missed some important details, you can challenge the appraisal and ask for a reconsideration. Sometimes there’s errors on an appraisal and if you can show evidence to support your claim, then you may have a chance the appraiser would revise the report.Or you can order a second Appraisal. Some lenders will allow for a reconsideration of value and allow for a second appraisal to be ordered, however, it can cost you another fee. And of course you risk the chance it still may not pay off.Another option is that you can negotiate with the seller. The best scenario is to try and negotiate with the seller on the difference in sales price. This option is probably the easiest and can be done if both buyer and seller parties agree to the adjustment.And finally, you have the option to cancel the sale if you have an appraisal contingency in place. This option is usually the least favorite route to take but that’s why it’s always wise to have an experienced agent with good negotiating skills & the know-how to pivot if things aren’t in your best interest. Who you work with matters!!If you found this content useful and want to stay informed, hit that like & follow button so we can connect and get the right guidance on your next move!