What Happens If An Appraisal Comes In Low?

Three options for dealing with a low appraisal.

Buying in Northern New Jersey? Get a Full Home Search

Selling in Northern New Jersey? Free Home Price Evaluation

When an appraisal comes in low, consumers typically have an appraisal contingency built into their offers, but buyers and sellers have three options to proceed:

1. Meet in the middle. The most common approach is to negotiate to see if the buyer and seller can meet somewhere between the contract price and the appraised value.

2. Bring the difference in cash. The buyer’s lender will only loan the appraised value, so if the appraisal comes in, say, $10,000 lower, the buyer can decide to fill the gap themselves. As a seller, you would be more likely to do this if there were multiple offers on your property.

3. Cancel the deal. You as the buyer always have the right to cancel the contract if you’re not willing to match the difference or if the seller isn’t willing to meet you in the middle.

As real estate agents, we do work to make sure that the appraisal comes in at the contract value. One of the biggest benefits of working with a solid listing agent is that we can communicate with the appraiser to convey why the seller received the offer they did and justify the price with recent sales data. We’ll also appeal to the number of showings and offers the house received, as well as the short amount of time it was on the market. Information like that can also help the appraiser understand why the buyer came in with that offer.

"We’ll be able to communicate with the appraiser to convey why the seller received the offer they did and justify the price with recent sales data."

If you have any questions about this or anything else to do with real estate, give us a call or send us an email. We’re always here to answer your questions and make you feel comfortable with any decision you make.

The Difference Between an Appraisal and Inspection

Here are the differences between an appraisal and a home inspection.

Buying in Northern New Jersey? Get a Full Home Search

Selling in Northern New Jersey? Free Home Price Evaluation

Today I’ll go over the difference between an appraisal and a home inspection. The terms are often used interchangeably, but they’re separate things that serve different purposes. Here are the main differences you should know, since you may be asked to waive one or the other in this market:

An appraisal looks at your home's value compared to other homes that have sold. A bank isn't interested in lending more money than a property is worth, so they hire an appraiser to compare it to other recent sales and find out what the market value is. Their goal is to ensure that the home's value is at least that of the sales price.

“

    Appraisal and inspection are often used interchangeably, but they serve different purposes.

”

A home inspection looks at the condition of the property itself. A licensed and certified home inspector will spend three to four hours, depending on the size of the house, looking at every part of the property. They'll turn on the faucets, check for leaks, make sure the electrical outlets are wired correctly, and even jump up on the roof. They’ll check the condition of all the home's systems and provide a full inspection report for the buyer and their attorney that details anything wrong with the property.

This is a very brief overview of the differences, so if you have any more questions for us, please email or call us. We look forward to hearing from you and answering any questions you may have.