HARRISONBURG HOMEOWNER
  • Blog
  • Sell a Home
  • Find a Home
    • Buying Guide
    • New Listings
  • Contact
  • Lakewood Estates
    • Active Listings
    • Plats and Covenants
  • Kiva Program

What Happens if the Appraisal Comes Back Low?

1/16/2019

0 Comments

 
Picture
First of all, if you are dealing with a contract, you'll want to defer to the language written in the contract.  Appraisal contingencies are often not built into a standard offer but are added to spell out what happens in the even the appraisal comes in lower than the purchase price. 

If an appraisal comes back low, it is possible to challenge the appraisal report.  You can look over the report and give them alternative comparable properties that help support the purchase price. If the appraiser will not make adjustments, here is what happens. 

Seller Side
If you are the sellers you will likely ask the buyers to come up with difference in cash to make the deal work out.  To explain this more, the buyers will not be able to get a mortgage for above the appraised value and therefore would need to bring the difference in cash should they want to still buy the house.  This could look like the following:

$205,000 - Purchase Price
$200,000 - Appraised Value
     $5,000 - Buyer pays the difference in cash to be able to buy the house.

Buyer Side
If you are the buyer, you will ask the seller to reduce the cost of the house since the appraisal came back low.  So, in the above example, you would ask the seller to reduce the purchase price to $200,000.

Compromise
There is also room to compromise.  Using the same numbers as above, a possible compromise would be for the Seller's to reduce the cost of the house by $2,500 and the Buyer's to bring an additional $2,500 to make up the difference.  

Terminate
Finally, if neither parties are willing to budge, the final option is to terminate the contract. 

If you have any questions about how to protect yourself from appraisals in selling or buying a house, call or email me. 
0 Comments



Leave a Reply.

    RSS Feed

    Categories

    All
    Appraisal
    Association Fee
    Backyard Fire
    Bank Owned Homes
    Best Of Harrisonburg
    Best Of The Valley
    Bidding War
    Broadway
    Bubble
    Buyer Profiles
    Buying
    Cash
    Closing Costs
    Commercial
    Coronavirus
    Deferral
    Depreciation
    Development
    Down Payment
    Featured Listings
    First Time Homebuyer
    Flipping Real Estate
    Forbearance
    FSBO
    Getting Ready To List
    GIS
    Harrisonburg
    Home Inspection
    Home Preperation
    Inventory
    Investment
    JMU
    Key Terms
    Kitchen
    Land
    Loan Commitment
    Local Guide
    Map
    Marketing
    Market Report
    Massanutten
    Mortgage
    Moving
    National Statistics
    Negotiations
    New Construction
    Office
    Organizing
    Penn Laird
    PMI
    Preston Lake
    Recasting
    Refinance
    REI
    Relocation
    Remodeling
    Rental
    Rockingham
    Safety
    Sales Forecast
    School District
    Search
    Sellers Market
    Selling
    Settlement
    Staging
    Tax
    Timberville
    Title Insurance
    Township
    TRID
    Utility Costs
    Utilty
    Video
    Virtual Reality
    Weekly Report
    Zillow

Picture
Picture
Email - Click Here
Phone - 540-246-9067
Website - www.mattiasclymer.com
​Schedule a Showing, Meeting, Etc...

Funkhouser Real Estate Group  |  401 University Boulevard, Harrisonburg, VA 22801  |  540-434-2400  |  ©2021  |  Privacy Policy  |  All rights reserved.

Licensed in the Commonwealth of Virginia
  • Blog
  • Sell a Home
  • Find a Home
    • Buying Guide
    • New Listings
  • Contact
  • Lakewood Estates
    • Active Listings
    • Plats and Covenants
  • Kiva Program