How to Handle a Low Appraisal

How to Handle a Low Appraisal

Part of any home loan is the appraisal. A professional appraiser will use recent sales of comparable properties to compare with the property being financed and determine if the sales price is fair. When the market is steady, the value is fairly easy to determine. When the market is heading up (or down) then it might not come back at the value you expected.

So what are your options if the appraisal comes back lower than the price you’ve offered and had accepted? Does this mean that the transaction is over? Not at all, there are quite a few options to keep the transaction on track.

  • Do Your Research and Dispute the Appraisal – Review the appraisal with a critical eye and make sure they are using the correct market data. If you have concerns, dispute the data.
  • Lower the Sales Price – It’s also possible the list price was simply too high. One option is for the seller to lower the price to the appraisal price.
  • Ask the Lender for a New Appraisal – If you feel the data was simply incorrect, you may request a new appraiser to start from scratch. (At additional cost)
  • Pay the Difference – Increase the down-payment to accommodate the appraisal value.

Working as a team with the agents, buyer and seller, a low appraisal does not have to be the end of the transaction, just a road bump.





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