Here are five different roads you can take if your appraisal comes in low.
If you’re buying a home and the appraisal comes in low, you have five different options to proceed:
1. You can terminate the contract. Provided you have an appraisal or mortgage contingency, you should be able to terminate the contract and get your deposit money back.
“If you truly want the home, it might make sense to pay the difference yourself.”
2. Renegotiate the terms with the seller. Perhaps you can meet in the middle, or make a compromise.
3. Put up more cash. If it’s your dream home and you’ve been searching for it forever, you can foot the bill for the difference between the offer price and the appraised value.
4. Modify your loan terms. Most people don’t know this because they don’t ask about it up front, but lenders will usually have a lot of different creative options at their disposal for structuring a loan.
5. Challenge the appraisal. This is one of my favorites. You can leverage your relationship with your agent and the listing agent to provide more research and comparable sales in the hopes that they might resubmit or modify the appraisal.
These are five different things you can do if an appraisal comes in low, which has been happening more and more in our market. If you have any questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
