You’re so close to selling your home when the results of your real estate appraisal come back—and it’s pretty underwhelming. Maybe you’re a first-time homebuyer and your dream home turned out to be worth less than its selling price. A low home appraisal will keep the deal from going through, and it’s perfectly normal for both parties to be disappointed. Take a breather and have a glass of wine. Are you ready to take the next step? Read on—you have options.
Option #1: Appeal the Appraisal
If you believed the appraiser did an inaccurate investigation, there is an opportunity for an appeal. Unfortunately, if you’re the seller, you don’t have the power to do anything yourself. The lender is the only party that can demand an appeal, and the homebuyer can request a do-over. When it comes to the appeal, the lender is in control and has the final say in whether or not it can be done.
Option #2: Correct the Appraiser
The real estate appraiser is a certified professional, but everybody makes mistakes. Maybe he didn’t know that you gave the bathrooms a makeover or you installed a new fireplace. Create a detailed list of all your home improvements; if possible, include before and after pictures. Did the appraiser make poor comparisons between the property and other homes? You should point those out as well. Remember that comparisons should be made only between your property and others that have sold within the last three months.
Option #3: Order Another Appraisal
If you firmly believe that the first appraisal was incorrect, you can always pay for another one. This isn’t a cheap route to take, as you’ll be spending at least $200 on a new appraisal. If there are new findings in the second appraisal, the first appraiser will review the findings and change his first report as he sees fit.
Option #4: Go Through With the Sale
Home appraisals determine the value of a home. If an appraisal turns out to be lower than the market price of a home, a lender will refuse to finance the difference. Sellers would be more apt to cut a deal with the buyer. If you’re trying to go through with the sale, you’d be better off being flexible. Lower the price, and then see if the buyer would like to pay the difference in cash. However, this situation puts the ball in the buyer’s court, and they may be averse to overpaying for a house.
Option #5: Agree to a Lower Price
Selling for a lower price isn’t the seller’s ideal situation, but if you’re desperate to sell, you can always do so. After all, many buyers won’t pay more than a house is worth unless they’re absolutely in love with the property. And if the deal falls through, you can always put your house back on the market.
