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What do I do if my appraisal comes in low?

By
Real Estate Agent with Keller Williams Realty

The first concern is typically will the sale be able to be completed since you have a willing an able buyer and a willing and able seller that have agreed on conditions. The appraisal is generally ordered within 10 days of an accepted offer and can take about a week to have completed to find out any conditions that need to be addressed and what value the bank is placing on the home. The biggest downside is the appraiser could be from out of town, or an adjoining county and not know the area and place a low value.

So a few things you as a seller can do:

1. Have another appraisal ordered at your cost. Have the buyers agent agree to it, and if sales price comes in @ contract price or higher you can move forward.

2. Reduce the contract price to what the appraisal is.

If neither of these solutions are possible, you may be forced to hold onto the home. For a free value analysis on your home, go to www.HomesForSaleKalamazoo.com and register.

 

Show All Comments
Roy Kelley
Retired - Gaithersburg, MD

Thanks for your suggestions. Best wishes for continued success.

Dec 20, 2009 10:54 PM
John Combs
Alan Deblat Real Estate Corp. - Oceanside, NY

Low appraisals are a real issue right now. Both high  and low end homes are having appraisal issues.

Dec 20, 2009 10:58 PM
Matt Mulder
Keller Williams Realty - Kalamazoo, MI

I did 45 transactions this year and only had 1 come in low, but its not fun to be in the sellers shoes.

Dec 20, 2009 11:01 PM
Al Wright
Affordable Canadian Home Inspections - Hamilton, ON
Have your inspections performed the Wright Way

I bought a rental propery 3 years ago for $260,000 and had it appraised for that value. I replace the roof, couple of doors and the boiler ($30,000). I put it up for sale and got an offer at $342,000 (Was asking ($360,000) and the appraisal went through no problem. Sometime I think appraisers just look at what it is selling for and sign on the dotted line. The reason for this the house has not gone up ove $80,000 in value in 3 years. So what do we believe, the first appraisal was undervalued, or the new appraisal signed on the dotted line. Either way the home is sold and closes in a week

Dec 20, 2009 11:19 PM
Anonymous
Rachel Massey

Please remember that with the HVCC the lender can not use an appraisal that was ordered by the buyer or seller (or agent or loan officer, etc.) and that appraisal that the seller obtained would be for peace of mind only, not for mortgage financing.

I know it is frustrating to have a deal put together and then have it shot out of the water (or not) by an appraisal that doesn't support the sales price, but there are options for further negotiations, or larger down payments or different venues of financing. I sold real estate between 1984 -89 and understand that things have changed drastically in that time frame, but back in those days it seemed that about 20% of my transactions did not appraise at sales price. From there we simply negotiated, either with the price being adjusted, the buyer coming up with more money, or an "in house" loan, or the deal fell apart and the buyer eventually found a better house. 

Dec 23, 2009 01:35 AM
#5
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