As a buyer what do you do if the appraisal on the house you are purchasing comes in lower than the amount you offered to pay?
Hi, I’m Tanja Odzak, Our East Bay Home brokered by eXp Realty…
To obtain buyer financing, part of the transaction process is for your lender to order an appraisal on the property.
So what is an appraisal? An appraisal is an unbiased estimate or opinion of the fair market value of a property, usually performed by a licensed appraiser. The appraisal is done through inspection of the property and also by looking at recently sold comparables in the area based on condition, location, upgrades, etc.
There are times however when an appraisal comes in lower than the accepted offer price. As a buyer, this can be frustrating and disappointing as it could mean you won’t be approved for your *full loan amount*.
But don’t despair as 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 appraiser and ask for a reconsideration. Sometimes there are errors on an appraisal and if you can show evidence to support your claim, then it may become possible to have the appraiser 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 appraisal fee. You also risk the chance it still may not pay off by not appraising again at the accepted offer price
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 usually be completed with a good agent negotiating on your behalf.
Finally, you do have the option to cancel the sale. If you have an appraisal contingency in place, you have the option to cancel the sale if the appraisal does not come in at value. This option is usually the least favorite route to take and that is why it is always wise to have an experienced agent with good negotiating skills that can help work out any appraisal discrepancies to your advantage. Contact me today so I can help you strategize the sale of your home and guide you every step of the way.
And if you’re someone that needs to sell a home, ask me about my home selling plans where you get to pick which real estate services you want and the fee you pay… Most of the them include my super duper digital marketing that… no one else does in our area. I’m Tanja and I sell homes. I offer simplified and transparent choices!
I’m a Top Producing Realtor® in the OAKLAND / BERKELEY / EAST BAY AREA. I’ve been in the San Francisco East Bay Area since I came up to do my undergrad at UC Berkeley (a long time ago!), with a short stint at UC Davis while getting my Master’s. I take my duties as a Realtor® and Fiduciary very seriously, I enjoy educating my sellers and buyers along the way. Putting People, Before Profit.
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