Next Steps When the Home Appraisal is Below the Purchase Price
If your client does not feel the appraisal represents the value of the home, there are couple things he or she can do:
- Review the appraisal with the lender. Your client can discuss the appraisal with the lender to find out more information about how it was done. What type of comparison houses were used for it? Were they within a close proximity of the home being appraised? Were they of similar style? Did the appraiser know of the surrounding area’s school system or other neighborhood amenities that could positively affect the appraisal?
- Get a new appraisal. If the lender believes the appraisal to be accurate and therefore does not want a new appraisal, your client could try a new lender. However, they should realize that the next appraisal could be similar to the first one. In addition, since the home buying is often a time sensitive pursuit, a delay could create other issues.
If your client believes the appraisal to be accurate, he or she has a few choices.
- Negotiate a lower sales price. If the price is more than the appraised value, ask for a lower sales price. Depending on the seller’s motivation for selling, you may be able to get the home for a lower price.
- Make up the difference. Depending on the buyer’s motivation for the house, he or she may want to simply make up the difference in price.
- If there was a mortgage contingency in the sales agreement, an appraisal falling short would typically fall under it. So walking away from the house could also be an option.
At Equity National, we are focused on working with you to give your clients a positive buying experience. Give us a call at 888-434-5500 to find out how we can help you.
By: Equity National February 20, 2015 Uncategorized