What To Do if Your Home Doesn’t Appraise
Four options in your contract you can use if your home doesn’t appraise.
What happens if the buyer’s appraiser doesn’t appraise your home at the contract value? There are several mechanisms in the contract that can help sellers if this happens. However, first and foremost, sit down with your agent and carefully review the market analysis. It could be that the market has shifted considerably within the last couple of weeks. Perhaps there were a few pending homes that closed for less than you expected. In this case, here are four things that every contract allows for:
1. A reconsideration of value. Review the appraisal with the bank to see if they’ll reconsider. Just know that they rarely do.
2. A new appraisal. This will take time and money, which many buyers aren’t willing to give up.
"Sit down with your agent and carefully review the market analysis."
3. A price adjustment. You can lower your price to the appraisal price, keeping the contract together and closing the transaction. Or you can negotiate a price in between, as sometimes buyers or sellers are willing to make up the difference.
4. A separation of contract. In this case, the buyer isn’t under any obligation, the earnest money is returned, and the home goes back on the market.
Since our housing market is in the middle of a correction, this issue is happening regularly, so make sure you’re prepared. Talk to a real estate professional beforehand to ensure you know your options. If you have any questions, call or email me anytime, I’d love to hear from you.