Here’s how low appraisals are typically handled in this seller’s market.
In a rapidly appreciating seller’s market like we’re in right now, it is not that uncommon for an appraisal to come in lower than the agreed-upon purchase price during the contract process. The appraiser’s job is to check the value of the home and make sure that the bank is protected in case of mortgage default. Keep in mind that a home’s true value is what a buyer is willing to pay for it.
What happens when an appraisal comes in below the agreed-upon price? The buyer could make up the difference in cash by lowering their down payment, the seller could agree to lower the price, or they could cancel the contract. In today’s market, buyers have frequently been waiving appraisal contingencies or offering to pay over the appraised value in cash to secure the home.
If you have any questions about low appraisals or the real estate market in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
