This is the second article in my blog series on what happens when there is a low home appraisal in a real estate sales contract. If you’re just joining us, you can read Part 1 here.
Low Home Appraisal – What Happens Next?
If an appraisal comes in low, the homebuyer has a chance to negotiate the sales price down to the appraised value. The seller doesn’t have to agree to lower the price, but if there is no agreement after these new negotiations, the buyer can void the contract and get their deposit back.
Most buyers don’t want to pay more than the appraised value for the home. However, if the difference between the low home appraisal and the sales price of the home isn’t great, sometimes buyers and sellers are able to reach a compromise on the new sales price.
My Home Appraisal Came in Low – Can I Appeal it?
Sellers cannot appeal a low home appraisal in a real estate sales contract - A buyer is the only person who can file this appeal. The buyer would have to start this process through their lender. If the buyer can show that the appraiser left out some important information with regard to appraising the value of the property, the appraiser will sometimes make the corrections on their report and issue a new appraisal. An example of some important information would be failing to take into account a subject property's substantial upgrades or perhaps neglecting to factor in a very important recent comparable sale into the analysis.
I hope you’ve enjoyed this blog series on what happens when a low home appraisal happens in a real estate contract.
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