My appraisal came in too low?
It can be disappointing if your home appraisal is lower than the purchase price you agreed to with the seller. However, there are a few things you can do in this situation.
Renegotiate the price with the seller
One option is to try to renegotiate the purchase price with the seller. You may be able to convince them to lower the price to match the appraised value. However, this is not always possible, and you may risk losing the deal to another buyer.
Consider an FHA loan
Another option is to consider financing the home with an FHA loan. The FHA offers two types of 203k loans that can be helpful in situations where the appraisal comes in too low.
- The Limited 203k loan allows for an additional 10% of the appraised value to be used for closing costs and energy-efficient improvements. This means you can close on the home without renegotiating the price with the seller.
- The Standard 203k loan allows for up to $35,000 to be used for repairs and renovations. This can be a good option if you need to make significant repairs to the home. That $35,000 cap is being increased to $75,000.
Additional tips
Here are a few additional tips to keep in mind if your appraisal comes in too low:
- Get a second appraisal. If you are concerned that the first appraisal was inaccurate, you can get a second appraisal from a different appraiser.
- Be prepared to walk away. If you cannot agree with the seller, you may need to be ready to walk away from the deal.
It is important to remember that this problem has no one-size-fits-all solution. The best course of action will depend on your circumstances. If you are unsure what to do, you may want to consult with a real estate agent or a mortgage lender.
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