If you’re reading this, there’s a good chance you already know what an appraisal coming in low means because it just happened to you. For those who are new to it, here’s a brief description.
An appraisal coming in low is what happens when you put a home for sale, and someone makes an offer on the home for a set price, say $300,000. After the home is appraised, however, the appraiser says that the home is worth less than that $300,000, perhaps $280,000. This means that the banks involved won’t lend $300,000 for the home’s purchase price.
If this happens to you- what do you do?
You’ll have three options.
1-Ask for a copy of the appraisal and give it to your Realtor. They’ll be able to comb through it and make sure that nothing was missed and that there weren’t any mistakes. I’ve seen this happen before, where an appraiser had missed 100 square feet in the house (and at 129 dollars a square foot, that means that the appraiser was off by almost $13,000!). This can be an easy fix- just inform the appraiser.
2-Drop the price to whatever the appraiser said the house was worth, which, as a seller, can be disappointing.
3-Meet somewhere in the middle. If the buyer has cash, they can meet in the middle via cash. In our earlier example, you could ask the buyer to get a loan for $280,000 and then pay $10,000 in cash so that they can still get a loan but you don’t miss out completely on the agreed upon price.