Having a house appraised under sale price can create some difficulty for buyers and sellers. This is why it is always a tense time when waiting for an appraisal to come back. Any buyer will start to get nervous that their appraisal is going to be lower than expected. Having a house appraised under sale price can feel like all hope is lost.
However, there are ways to handle a low appraisal when trying to buy a house.
Challenging the Appraisal
Sometimes an appraisal is completed and everyone involved feels like it is incorrect. If the appraisal is too low and there are reasons that it should be higher there is a chance that the buyer can appeal the appraisal. This does take a lot of time and effort. Many people still do not get their appraisal changed even after providing additional evidence as to why it is incorrect.
Always look at the comparable houses that the appraiser used. A local real estate agent will know more about these properties and may have even worked with the buyer and seller that hashed out a deal. Make sure to note if any of these properties are not comparable to the property and why they should not be used to determine the value.
A Different Appraisal
A seller may disagree with an appraisal – especially a house appraised under sale price. They may want the buyer to order a second appraisal in an attempt to get the desired value. This would work in their favor so they can still sell their home at the price that they wanted.
But the buyer is the one that will be paying for this appraisal. The first appraisal is one that is typically paid for with closing costs. However, if multiple appraisals are needed the buyer can see hundreds or even thousands of dollars going towards appraisals. A seller or real estate agent that really wants to make a deal may offer to pay for an appraisal if they are certain it will come back higher.
Talking With the Homeowner
Most sellers understand that multiple appraisals may still say the same thing. They will not want to waste their time trying to get another appraisal and they certainly do not want to have to find another buyer. This is why when dealing with a house appraised under sale price, it is worth it for buyers to try and negotiate with a seller to lower their price to better match the appraisal.
Few sellers want to find a new buyer once there is an interested party. Unless they have been getting other offers, they will want to work it out with the current buyer to get the house sold. Even if they do not want to lower their price, it is likely the next buyer is going to get an appraisal that shows a similar value.
Keep Looking
It is disheartening when the perfect house comes along and the appraisal comes back too low. A lender is not going to provide a loan for a house that is more than it has been appraised for. The buyer has to make the decision on whether they can afford to pay the costs out of pocket or if they are going to walk away.
It is disappointing to learn that a house does not appraise for what is expected. A house appraised under sale price can make it impossible to complete the deal if the seller will not budge on the price. A buyer without extra cash to put towards the house can only appeal the appraisal or decide to move on to the next house.
