What to do if Your Home Appraisal is Less than the Asking Price.
This blog is taken from an article from SF Gate, and online news source. Home Appraisers, such as Premier Home Appraisals work hard to make sure their clients do not end up in this situation, but it does happen at times and here are some ideas on how to handle it.
Read the full article here
The article talks about the various ways appraisers come up with the appraised amount. When it comes to that amount being lower than the asking price, this is a problem. Lenders won’t generally fund a mortgage for more than what it is worth. This means buyers cannot get a mortgage loan for the amount of the house they want to buy. If they already have a contract on the house, they may need to back out.
Here is an excerpt from the article about this:
“If the buyer signs a contract before the appraisal comes in, it’s important to include that on the list of contingencies, the Truth About Realty website states. Contingencies are a list of reasons for canceling the sale without breach of contract, such as the buyer not qualifying for a mortgage, or not being able to sell their own home. If there’s no contingency regarding a low appraisal, the buyer may be obligated to buy the home at the asking price.”
Here are some ideas for how to handle it if you want to follow through with the house purchase:
“The buyer can make the larger down payment to meet the asking price; the seller can lower his price to match the appraised value; they can negotiate something in the middle; or they can look for evidence that the appraiser was wrong about the market, or that the homes he compared weren’t really similar.”
Of course, the last suggestion to look for evidence that the appraiser was wrong would not be something we would recommend. At Premier Home Appraisals, our experience and dedication to quality ensures the amount we appraise a house for is it’s actual value at that point and time.
Contact us if you have questions or if you would like to schedule your home appraisal in Northern Virginia.