Buying A House: Appraisal Came In Low. Now What?

October 14th, 2009 | Category: appraisal

In different parts of the country, many folks are starting to experience something that wasn’t all that common before just recently — the appraisal is coming in below the contracted purchase price that was agreed on by buyer and seller.

The reasons for that happening could include any number of things including the new HVCC laws, but considering it isn’t just happening to a few society, I thought it might be good to spread the word about what your options are whether you find yourself in that boat.

If you are selling your home and the appraisal comes in below contract sales price, you are not going to be very happy about it usually. Your options include:

Lowering the sales price to the appraised value
Talking the buyer into coming into close with more cash
Canceling the deal and hope to find another buyer soon
Getting another appraisal done and hope for a higher sales price

If you are buying a home and the appraisal comes in low, that is good news! Your options include:

Getting your agent to negotiate the new sales price to be the appraised value
Getting another appraisal done and hope it doesn’t come in at contract price
Backing out of the deal and hope to find another home
Bringing in more cash due to close

What is the most common solution that I personally see when an appraisal initially comes in below is sales price is that the seller reduces the sales price to be the appraised value. The second-most common thing I see is that the deal falls apart completely.

But no matter what you are able to negotiate and whether you are the buyer or the seller in the transaction – when you agree on a sales price and next the appraisal comes in low… anything can happen.

Orginal post by Justin McHood

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