Here’s what happens when an appraisal comes in below the sale price.

In today’s market, we’re seeing low appraisals happen a lot more often than we have in the past. Homes are selling with multiple offers and often over asking price, which is when we start worrying whether or not the appraised value will meet the contract price. The appraiser’s job is to ensure the home’s value meets the value of the sale price to guard against any issues with the bank later on. When the property doesn’t appraise to that sale price, here are your next steps:

1. Review the appraisal report. These appraisers are busy right now and human error could play a role.

2. Submit a rebuttal. If there are issues found or comparables the appraiser didn’t take into account, we can submit a rebuttal to try and prove to the bank that the home is worth the contract price. Sometimes we can increase the home’s value this way, sometimes we can’t.

“Appraisers are very busy right now, and human error is possible.”

3. Renegotiate the terms. This is the last step. If both a buyer and seller want to make the transaction work, there are many ways we can come together and do that.

If you have any questions about this situation or your specific real estate situation, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.