What Happens When You Encounter Appraisal Issues?
What can buyers and sellers do if an appraisal comes in short? Let’s find out.
Appraisals are a necessary component of any home purchase.
For those who may be unaware, an appraisal is simply a paid professional’s opinion of a property’s value.
This value determined through the appraisal process is supposed to be the same as the property’s fair market value, but this is not always the case.
The market value of a home is what a ready, willing, and able buyer is willing to pay and what a seller will accept—which is not necessarily congruent with what brokers or appraisers might believe the home to be worth.
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And given that home prices have been rising since 2012, appraisals these days often come in below the price in the sales contract. Thankfully, this doesn’t necessarily spell doom for the deal. There are a few ways a transaction can proceed after an appraisal comes up short.
Buyers and sellers may renegotiate a new price, the buyer may ask their lender for an appraisal rebuttal, or the buyer may choose to pay the difference between the appraised value and the home’s initial price in cash.
If the buyer and seller can’t agree on one of these options, though, the deal may be canceled at this point.
As always, if you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
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