Solving the Problem of a Low Appraisal

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Our question for today is, what happens when an appraisal comes in low? There are a few choices in how to proceed.

The first choice would be for the seller to lower the price of the home. This initially may not seem like a great option, but it could be the best one for the seller. It allows them to keep the buyer under contract and ultimately meet their goal of selling their home, even if they’re accepting less than what they originally agreed to.

The second choice would be for the buyer to bring additional funds to the closing table and pad their down payment. If the buyer doesn’t have that option because they don’t have the extra money lying around, they do have the choice of canceling the contract and finding a different home. The seller then, of course, would also have to go through the whole process again.

If the buyer has the additional funds and decides to buy because they think the house is worth what they agreed to purchase for it, that’s not necessarily a bad idea either. Remember - an appraisal is an opinion of value. If you have multiple appraisals done on the same house, you might get multiple different values on it.
Remember - an appraisal is an opinion of value.
The next choice would be to go through an appeal process. This isn’t available in every circumstance, and it’s not always the best course of action, but we would certainly help guide you through it if it comes to that.

The last choice is a technique we try teaching our kids all the time: compromise. Maybe the buyer lowers their price a little; maybe the seller brings in some additional funds. Either way, they meet somewhere in the middle and everyone goes home happy.

Of course, the key to all of this is having an agent that knows how to guide you through the process, give you the best options available, and negotiate in the best manner possible to achieve your goals. If you’re thinking about buying or selling, please give us a call or send us an email. Have a great week!

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