What is a house appraisal? During the process of selling a house, a bank appraiser will estimate the value of the home to ensure there are no safety hazards or surprises for the buyer. He or she determines if the home’s selling cost is at least what the buyer and the seller have agreed to. Although uncommon, if the appraiser decides that the property value is lower that the agreed upon price, the seller and buyer, with the help of their realtors, will have to consider these alternatives.
Challenge The House Appraisal
Challenging an appraisal is difficult, but sometimes it’s the only option if you want to change the appraised value. If you decide to do this, ask your realtor how you can do so with care and consideration.
The Buyer Comes up with the Difference
Although uncommon, the buyer can agree to pay the difference between the purchase price and the appraised value. Many buyers find it hard to pay more for a home than their bank appraisal indicates, so this scenario is fairly uncommon, though it can happen.
The Seller Makes A Concession
The most common result, the seller can agree to sell the home for what the appraiser determines as the acceptable value, even though the appraisal came in too low.
The Transaction Is Cancelled
The worst possible scenario: the transaction is cancelled when the seller doesn’t make a concession and the buyer won’t (or can’t) bridge the difference. Unfortunately for both the seller and buyer, this is one of the most common results from a low appraisal.
In the End
You have options when the bank appraisal is lower than the agreed upon price, but if you listen to your realtor’s suggestions and are willing to compromise, you can usually save the deal.
Are you in the process of selling your house? Download this customized checklist to learn everything you need to know about the entire process.