A low home appraisal can cause problems for both a buyer and a seller in a real estate purchase contract. The appraisal occurs around 7 – 14 days after a contract is signed by both the buyer and the seller. It’s the appraiser’s job to assess the fair market value of the property, and to make sure the buyer is not paying more than market value for the home. Although the buyer pays for the appraisal, it is ordered by the buyer’s lender, and the appraiser is selected from a random pool of licensed appraisers.
A Low Home Appraisal Report
When an appraisal comes back low, a new phase of negotiation begins in the contract. The buyer’s loan is always based on the property’s appraised value, not the sales price, so if the buyer still agrees to pay the higher sales price for the property, they’ll have to increase their down payment and bring more cash to the table. The extra cash will be equal to the difference between the sales price and the lower appraised value.
Sellers: My Home Appraisal Came in Low. Now What?
Read Part 2 of my blog series on what happens when there is a low home appraisal in a Northern Virginia real estate purchase contract. We’ll discuss options available to both sellers and buyers.
Email me at DarrenRobertsonHomes@gmail.com for a free list of the top 5 mistakes Northern Virginia home sellers make.