5 Options for Low Appraisals

If your appraisal comes in low, here are five options available to you.

What happens if you’re buying a house and the appraisal comes in low? Today Mr. Licorice and I are here to spell out your options.

If you’re buying a house, you’re likely getting a mortgage, which means your lender will require an appraisal. An appraisal is the lender’s way of protecting their investment in case you default on your loan. The appraiser comes out to the house being purchased and compares it to three other similar homes in the area before giving an appraised value. Sometimes appraised values come in lower than the asking price of the house, especially in a market with rising home prices. What are your options? 

1. Analyze the report. We’ll look for mistakes generated by the multiple listing service. 

2. Challenge the appraisal. We can challenge the appraisal by finding other properties that are a better comparison for your home. It’ll be up to the appraiser if this changes the appraisal or not.

If you’re in love with the home, we could always go to a new lender. 

3. Negotiate. The buyer might be able to come up, the seller could drop the price, or the two could meet in the middle.

4. Restart the appraisal process. We can go to another lender, start a new appraisal process, and hope for a more favorable outcome.

5. Move on. The worst-case scenario is that the buyer finds a new home and the seller finds a new buyer.

If you have any questions about appraisals or buying a home in today’s market, give me a call or send me an email. I’d love to help you.