Some Solutions if Your Ann Arbor Home You are Buying Does Not Appraise?

Real Estate Broker/Owner with Missy Caulk TEAM

Some solutions if Your Ann Arbor Home You Are Buying Does Not Appraise?

Ann Arbor HouseThe first thing to do if the Ann Arbor home you are buying doesn’t appraise is to not panic.

You are excited and have made an offer on a home for sale in Ann Arbor, and now you are in the process of obtaining financing for your new Ann Arbor home. The bank or mortgage broker is going to want an appraisal on your home to guarantee that the home is worth what you are paying.

When we are representing buyers on a the purchase of the home in Ann Arbor, we write into the contract, “the purchase price must meet the appraised value of the home.” (even if you are paying cash.)

In this market, seriously… many homes do not come in at the Purchase price on the contract for Appraised Value.

How does a low appraisal affect you?

If the home does not appraise, then there is room for more negotiation with the sellers.

If the appraisal comes in lower than purchase price, you have some options

1) You can walk away from your Ann Arbor Home, because the appraisal contingency is part of the contract, and if the property does not appraise, that is a contingency that you can use to end the contract.

2) Another option for you would be to renegotiate the purchase price – by offering the sellers to pay the price that the property was appraised at. If you really want the property, that is a consideration. Offer the appraised value to the seller, and see what their response is.

3) You “may” want to consider paying more than purchase price – bring cash to close the deal. This is NOT something that I recommend for my buyers who are purchasing Ann Arbor Real Estate.

Keep in mind, if you are obtaining a loan on your property, then it is imperative that is appraises. Your lender will NOT loan you money to purchase the home if it doesn’t appraise at the agree upon purchase price.

Issues with Ann Arbor Appraisals

One of the biggest issues we have with homes appraising to the purchase price in the Ann Arbor Market Area is that appraisers are being hired by banks that do NOT live in the Ann Arbor area. Not knowing Ann Arbor, the schools, the taxes, (and a variety of other factors unique to the area) they often do not use the right home comparables.

This is not the market to pay over appraised value, and I would advise my clients against this. I would not recommend paying more for the property than it appraises for even "if" you can. 

If I can answer any question about Ann Arbor homes for sale, or Ann Arbor real estate, please contact me. 734-926-9707

(originally posted at

Posted by


Missy Caulk, Ann Arbor Realtor

Missy Caulk, Broker/Owner of Savvy Realty Group can be reached at 734-926-9797 or email:

Our Team of 6 agents are available to help you relocate to Ann Arbor, Saline, Dexter, Chelsea, Milan, Ypsilanti Township, Clinton, Manchester, Whitmore Lake, or throughout Washtenaw County, MI.

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Jeff Dowler, CRS
eXp Realty of California - Carlsbad, CA
The Southern California Relocation Dude


This happens all over, as we all know, and it behooves us to counsel our buyers, adn also sellers, about the possibilities and what the options are.


Feb 23, 2012 12:42 PM #20
Marilyn Boudreaux
Marilyn Boudreaux, Century 21 Bono Realty - Lake Charles, LA
Lake Charles LA Century 21 Realtor

Our Louisiana contract has a clause that the contract is conditioned/contingent upon appraisals.  With the appraisal management companies in control now no one has control over who the appraiser is and it seems that old dudes and in-experienced dudettes can get on the list.  I cringe when I get some of the names and pray the appraisal comes in at contract price.  We are also running into appraisal repairs more than normal.  I prepare buyers and sellers for the what ifs of peeling paint as just one hurdle.

Feb 23, 2012 12:55 PM #21
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

It's always a lot of fun here when homes don't appraise, and most of the time it's because we had an appraiser who doesn't know the area. We know that more are coming, but right now it's rare.

Feb 23, 2012 10:28 PM #22
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Appraisals can be such a wild card today.  Fortunately, I haven't had any come back low recently but no one can relax until this unknown is resolved.  Your suggestions for dealing with a low appraisal are spot on.  Good advice for buyers and sellers alike.

Feb 23, 2012 10:53 PM #23
Ric Mills
Keller Williams Southern Az - Tucson, AZ
Integrity, Honesty, and Vast Real Estate Knowledge

That is a big reason they hire us.  We take the panic out of the situation and find solutions.  This is not a "personal" thing to us, it is a business transaction.  We leave the emotions out of the deal and find ways to keep it moving forward. 

Feb 23, 2012 11:37 PM #24
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

I like your panic attack solution just as Ric, #25 commented about.

Feb 23, 2012 11:59 PM #25
James Pierce
Realty Executives Associates/Knoxville Realty - Knoxville, TN

The list agent can help the appraiser by having the homeowner provide important information that will result in a better apprisal.

*       Have the homeowner make a list of improvements made to the property since they purchased it.

*       Indicate work completed

*       Indicate approximate date when work was completed

*       Specific time frame

*       Have the list available to the Appraiser either via email, attachment with the contract, attachment to the appraisal order, or we can take it verbally.


Feb 24, 2012 12:14 AM #26
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Missy: Very good information for the buyer in today's market in general...even here in this land of "luxury" homes we have been hit by the housing bust and are still seeing prices it is an imperative that the buyer get an appraisal even if they are NOT going to finance. I also see the same thing with appraisals here--the appraiser is key; they must be local in order to get the proper valuation. Banks will send someone from mid-island to appraise a home in the Hamptons and the appraised values they come up with are less than 1/2 of what the value really is...they base their price on houses in very different areas and this can be very mis-leading, and not good for the seller! Congratulations on the well deserved feature!

Feb 24, 2012 12:14 AM #27
Cindy Edwards
RE/MAX Checkmate - Johnson City, TN
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677

Hi Missy,

Nice to see your smiling face.  The appraisal language in our contracts are in there for protection to all parties.  I feel that issues we had with appraisals back in 2004-2006 around here, were major components as to why we are in the situation we are in today. Back then all we had to do was call the appraiser and ask them to make it work, and it would!!

On a personal note, I think of you and your family often.  You will continue to be in my prayers.

Feb 24, 2012 02:07 AM #28
Hank Miller
Harry Norman Realtors - Alpharetta, GA
Associate Broker & Certified Appraiser

There's a major constant in the "room" and I'm not at all certain why it's not been touched upon, that constant are the closed properties. If the closed sales - the very same ones that an underwriter is going to review - don't support a value then what is the appraiser supposed to do?

If disagreement results due to difference of opinion over comps, then there may be cause for concern. However, keep in mind that appraisers really have no axe to grind and no reason to "kill" a deal. Their job is to ensure security for the lender and comply with underwriting guidelines.

Trust me, I know there are less than stellar appraisers out there but for the most part we can all see the comps available for use and have a pretty good idea of where things will fall. There are of course unique situations and times when it can get dicey - and that's when meeting them and handing them an info packet with comps to consider and features of your home might be helpful.

Feb 24, 2012 05:10 AM #29
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

Thank you for your comments everyone. One day at a time. 

Hank, we only really have issues with out of area appraisers. For instance an appraiser from Grand Rapids comes to appraise a condo in Canton. Our local appraisers are good. 


Feb 24, 2012 05:39 AM #30
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

These appraisers really have their hands tied and the new basic rules keep them from doing the type of job they need to do.

Feb 24, 2012 11:50 AM #31
Larry and Marilyn Mennetti


Feb 25, 2012 12:30 AM #32
Gary White~Grand Rapids Home Selling Pro Call: 616-821-9375
Flexit Realty "Flexible Home Selling Solutions" - Grand Rapids, MI
Real Estate Services You can Trust!

Glad to see you back!  Very Nic post too Missy, have a great year!

Feb 26, 2012 11:10 AM #33
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

Hiring appraisers that don't live in the area makes a big difference and sets a home up for a lower appraisal usually. We have had luxury homes get appraised because they were compared with less expensive homes in a different neighborhood as comps. That's really frustrating.

Feb 26, 2012 09:51 PM #34
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL

Missy - This is an excellent post for home buyers, low appraisal happen daily.

Feb 28, 2012 08:03 AM #35
Bas Panch
SCV Home Buyer - Valencia, CA

Hi Missy. Thanks for sharing this excellent post. This is important information home buyers need to know, and you explained it very clearly. Keep up the good work, I would recommend you to anyone looking for top Ann Arbor Short Sale Agents!

Mar 23, 2012 12:15 PM #36
Stephanie Anson
Anson Properties - Gainesville, FL
Estates | Homes | Land | Investments

Hi Missy! This situation is present in almost all state in Our Country and homes that do not appraise are really hard to sell. It will take an Ann Arbor Short Sale Agent expert to help them with the transaction.



Mar 25, 2012 11:40 AM #37
Kim & Kristine Halverson
Compass - Santa Monica, CA
Sisters, Realtors

Another Great blog from Missy.I always enjoy reading your blogs.You never fail us to share your knowledge.Continue what your doing I'm sure more success will be on the way.Best of luck!

Mar 27, 2012 04:48 PM #38
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

This is good info. I did get an appraiser to consider looking at some very relevant comps and it worked out for us. This is a situation that takes delicate handling.

Oct 23, 2012 06:58 AM #40
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