What Can You Do if Your Appraisal Comes Back Low?
If you're selling your home, there's a good chance that your buyer's lender will require an appraisal. The purpose of an appraisal is to determine the market value of a property, and if it comes back low, you have to adjust your transaction. There are several things that you can do if your appraisal comes back low, which this guide explains.
What Can You Do if Your Appraisal Comes Back Low?
If your appraisal comes back low, you have a few options. You may:
- Ask your real estate agent to contest the appraisal
- Lower your asking price
- Ask the buyer to make up the difference
- Return the buyer's earnest money deposit and try to sell to someone else
Here's a closer look at each.
Low Appraisal Tactic #1: Ask Your Real Estate Agent to Contest the Appraisal
If you think that the appraised value is incorrect, your first step should be to ask your real estate agent to contest it. Your agent will likely have a working relationship with the appraiser and may be able to provide additional information that can help increase the appraised value.
Related: The 5 most common mortgage types
Low Appraisal Tactic #2: Lower Your Asking Price
If you and your agent decide that the best course of action is to lower your asking price, do so. Usually, this happens when the home is overpriced from the start.
Low Appraisal Tactic #3: Ask the Buyer to Make Up the Difference
If the buyer is still interested in purchasing your home, you may ask them to make up the difference between the appraisal value and your asking price. This is typically done in situations where the appraisal value is close to your asking price. The buyer may be willing to do this if they're getting a good deal on the property.
Related: Can a seller keep an earnest money deposit?
Low Appraisal Tactic #4: Return the Buyer's Earnest Money Deposit and Try to Sell to Someone Else
If you're not able to come to an agreement with the buyer, you may return their earnest money deposit and try to sell to someone else. Be sure to consult with your real estate agent before taking this step, as it may not be in your best interests.
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