Ever had a real estate transaction go awry when the appraisal comes in less than the contract price? We've all been there and sometimes it doesn't end well. But, the transaction can be saved if everyone gets on board along the way.
First, there's the dreadful phone call that the appraisal has come in short :( Just when you thought you were in the clear! At this time, and until everyone reaches an agreement, just diffuse your clients frustration and anxiety and ensure them we will find a resolution and do our best to see if the seller will come down on their price. Who wants to buy with no equity?! Not me. (Unless it is an amazing house and you are certain that the appraisal just hasn't caught up to the market yet, of course). When you are representing the seller it is no less daunting to hear the news of a low appraisal. You are faced with an emotional seller who cannot believe that their home isn't worth what they thought it was. Not an easy situation on either side of the deal.
If the seller agrees to come down to the appraisal price, great! Everything moves on as is and everyone
is happy. However, if the seller is stuck on their price this brings on numerous back and forth phone calls between the buyer-to-realtor and realtor-to-selling agent and selling agent-to-seller and reverse. Phew, I'm exhausted just typing that! It makes for a long day or a long several days, depending on how quickly each party decides on things. There is no one way to negotiate the new price, as each transaction is different and each buyer and seller have different wants, needs, and opinions. Work towards the end goal of whichever client you are serving and if the other side can't agree then sometimes there are still options.
Meeting in the middle usually works, as long as the middle isn't still too high for one side :) Then it goes to the middle of that number, and then the middle of that number...you get my drift. If the buyer still insists on not paying over appraisal price though, and the seller won't come all the way down, this usually ends in a stalemate. When you have exhausted all options and one side isn't happy, sometimes they have to walk away. At this point whichever side you have has usually come to terms with it already because they have talked themselves into 'their price.' This is frustrating, because it leaves you with no deal on the table and no new contract in sight, yet. Work towards making your clients happy and in the end there will be a sale or purchase. And most importantly a HAPPY HOMEOWNER and HAPPY SELLER!
It's not ever easy, but someone's gotta do it!!
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