Saturday, January 24, 2015
6 Ways Sellers Can Bounce Back From A Low Appraisal Comment Now Follow Comments There’s no way around it: any home purchase financed by a mortgage involves an appraisal. This is how the bank ensures that the size of the loan isn’t greater than the value of the collateral (the house) needed for the loan. So what happens when the appraisal comes in below the price you and the buyer have agreed upon? This can easily happen in a competitive market, where houses frequently bring in multiple offers. On face value, multiple offers are good news for you, the seller. They often mean getting more than your original asking price. For the seller, multiple offers can feel like winning — and they are. Until your agent calls to tell you the appraisal came in below the agreed-upon sales price. Whomp, whomp, whomp. The good news is that a low appraisal doesn’t have to be a deal killer. Having a knowledgeable agent at your side can make all the difference when it comes to bouncing back from a low appraisal. Ready to fight back? Here are the top six things you can do. 1. Reduce the price of the house to the appraised value As the seller, you can always sell the house at the appraised value without negotiating with anyone. This is the fastest way to “recover” from a low appraisal, but it could mean leaving money on the table. (And that’s always hard to swallow.) 2. Have the buyer make up the difference In some cases, the buyer will have enough cash on hand to cover the difference between the appraisal and the selling price at closing. If the buyer feels confident that the value is there for her — despite the appraisal — she can simply add cash to the down payment, and the lender should be satisfied.