One of the worst things that can happen during a real estate transaction is a bad appraisal. You are already under contract, things are rolling along, and suddenly, everything stops because the appraisal didn’t meet the purchase price.
If the home does not appraise, the home will not be able to be sold for the agreed upon purchase price. This is bad news for both the buyer and the seller. However, there are a few things you can do to make it to the closing table:
First, the buyer can come up with the money to meet the appraisal price. Most buyers don’t want to do that. However, we are in a hot seller’s market right now, and many homes are drawing multiple offers. As a buyer, you might just have to bite the bullet and come up with the money.
The other option is for the seller to come down a bit on the asking price. Again, in this market, that is unlikely.
The third option is to renegotiate the terms of the contract. As a buyer, go to the lender and see if there is any room for adjustment in the interest rate. If the seller is paying for the closing costs, offer to cover them yourself. Ultimately, you can renegotiate to try and make the deal go through in a way that works out for everyone.
If you have any other questions about how to handle a bad appraisal or if you want to know more about our current real estate market, give us a call or send us an email. We would be happy to help you!