Thursday, March 14, 2019 / by Natalya Romanov
One of the reasons that low appraisals come in is that you probably were in multiple offer situation and picked the highest offer! Highest offer is not always the best and you need to keep in mind the value of your home.
Secondly, when listing your home you overpriced your home. Even though you did get an offer for the price listed the banks will not loan more money than the house is worth. This is why it is important to price your home accordingly when selling.
Currently, this is the most common issue we face is that the market is rising too fast. When the market rises so fast the system cannot always keep up with the updated prices and appraises homes for less than what they are worth. Also, some appraisals overlook the pending homes and miss the change that is happening.
How to deal with low appraisals?
One of the ways to deal with a low appraisal is to have your Realtor find comparable properties to justify the price of your home.
If even with the new comparable properties your appraisal does not go through there are a few more options. One the seller can lower their price to meet the appraised value. Secondly, the buyer can make a bigger down payment to make up the difference between the loan and purchase price. Thirdly, both the seller and the buyer can meet in the middle to ensure that the sale goes through! But if these things don’t work then sadly this will be the ending point for the contract!
This is why it is very important to be educated by your Realtor of the selling process and always be prepared for things that can arise!