What if my house appraisal comes in low? This is not a question home sellers look forward to answering. Finding out their home appraisal is coming back much lower than expected can be a seller’s worst nightmare is. This situation can often lead to a sale falling through.
Home sellers do not be caught unaware of the value of the home. To help avoid having to ask yourself “what if my house appraisal comes in low” take these steps to ensure the home appraisal is where it should be.
What if my house appraisal comes in low?
A lower appraisal does not always mean the house is not worth as much as the owner first thought. An appraisal is highly dependent on other homes in the area that have recently sold. These homes are seen as comparable properties and will help an appraiser determine value.
The slower the market the worse this situation can be for a seller. Even homes that sell high can be brought down by other homes selling for less. Any foreclosures or short sales are also counted into this value. This can drastically drop the value if the area is having trouble financially.
The Seller’s Duty
A seller should start their process by getting a pre-listing home appraisal. Waiting until there is a deal underway is the worst time to get an appraisal. The appraisal can be completed before the house is put on the market so the asking price can be set at a reasonable level.
The initial home appraisal can be used during the sale to help the buyer see the value of the home. When they hire an appraiser the pre-listing appraisal paperwork can be provided to prove why the home is worth at least that much. This can help ensure a new appraiser will not lower the value of the home.
But what if my house appraisal comes in low? In situations like this, home sellers will want to challenge. This is money out of the seller’s pocket. Any discrepancies between the home and comps should be pointed out and asked to be taken into account. Appraisers are able to account for anything they missed if the owner shows them why they are wrong in their initial judgment.
The Buyer’s Duty
Even though it seems like the job of the seller to get a high appraisal the buyer should look to keep the appraisal close to the asking price. If there is a large discrepancy between the appraised value and the amount they have offered on the home their lender is unlikely to fund the purchase. The buyer will need to come up with the difference out of their own pocket.
The best way to get an accurate appraisal is to ask for an appraiser that is from the county the home resides in. An appraiser that has residential appraiser certification plus a professional designation is going to give a more accurate picture of what the home should be valued at.
Talking with the appraiser can help to avoid any confusion about the value of the homes in the area. Letting an appraiser know about many foreclosures and short sales will help them understand why the market is valuing so much lower than the house that is for sale.
Sellers know that a low home appraisal can ruin a sale. And it is not uncommon for an appraisal to come back too low for a lender to finance the asking amount. A common answer to the questions “What if my house appraisal comes in low” is that buyers walk away from a house because they cannot pay the difference out of pocket.
As home sellers, you should always get a pre-listing appraisal. Do your research so you know what the local market is doing. By arming yourself with this information, you will be able to justify and defend an accurate number.
