Navigating a Hot Market: What to Do When Home Appraisals Come in Low

Greetings! It's Lori Mode here, delving deep into a burgeoning issue that sellers in our red-hot market face: what transpires when a home appraisal comes in lower than the selling price?

The Appraisal Gap Conundrum

Picture this: your house is on the market for $450,000. Given the current state of the market, you quickly receive multiple offers, pushing your home's price to a tantalizing $480,000. However, a snag occurs. The bank's loan is tethered to the home's appraised value. An appraiser values your home at $465,000, creating a $15,000 difference.

Navigatig the Gap: Options at Han

Buyer Covers the Difference: The buyer might decide to foot the extra $15,000.

Seller Reduces the Price: You, the seller, can revise the price to the appraised value, meaning dropping it to $465,000.

Meeting Halfway: You can split the difference. If both parties contribute $7,500, the final selling price would be around $472,500.

Deal Termination: If neither party can or wants to cover the gap, the deal may fall apart.

To fortify the selling process, it's crucial to choose an offer likely to close successfully. This might mean prioritizing buyers who are ready to pay above the appraised value, or those who have a reputable lender.

Preemptive Measures for Sellers

An essential part of my strategy is engaging directly with appraisers. Meeting them with vital data—comparables, a detailed list of the house's upgrades, and even the nuances of the bidding history—can influence a more favorable appraisal. But even with these precautions, the outcome can be unpredictable. Multiple appraisers can yield varying results.

In rare circumstances, if an appraisal feels off, it's possible to contest it. However, chances of overturning the initial assessment are slim.

Need Expert Advice?

Still pondering about the home selling process, or contemplating putting your house on the market during this period of low inventory? I'm here to assist and guide. You can reach me directly at (916) 230-0371.

Do you have further queries or insights? Please share them below. Until our next interaction, prioritize safety and make informed decisions. We'll chat soon.

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