What happens when the appraisal is lower than the contracted sale price on a home? You likely know that the real estate market is extremely hot this year, so we’re seeing this issue more than ever. If the appraisal contingency hasn’t been waived, four things could happen:
- The buyer can proceed to settlement at the contracted sale price.
- The seller can lower the sale price to match the appraisal.
- The buyer and seller can renegotiate somewhere in between.
- The contract becomes void.
Usually, the buyer’s lender orders the appraisal from a licensed appraiser. They’ll look at recent sales in the neighborhood, updates to the property, and any improvements made. As the listing agent, I generally provide an appraisal package to the appraiser that includes the recent comparables or sales I’ve used, the updates and improvements the seller has made, along with a floor plan or survey, if available. Appraisers are very busy right now, so they generally appreciate the help.
If you have further questions about appraisals or any other real estate topic, please don’t hesitate to contact me via phone or email. I would love to help you.
