Today we’re excited to bring you the first installment of a two-part series on what you should do when your appraisal comes in low.
We’re in a strong seller’s market right now. Certain price ranges are generating multiple offers for the listings that are out there, so sometimes an appraiser will enter the picture and disagree with the price that is listed on the contract.
From a buyer’s perspective, the first thing to remember is that you always have the right to cancel the contract if the appraisal comes in low. This is the easy solution, but it doesn’t get you the house.
Typically when an appraisal comes in low, most people will try to renegotiate. This may mean that the buyer will have to come up with some extra funds or get rid of some closing costs that have been previously negotiated with the seller.
Usually, there is an attempt by both parties to make it work out for everyone.
If it was an FHA appraisal, then the appraisal stays with the property whether the deal works out or not.
During the process of renegotiating, it’s important that everyone pays attention to the contract deadline. Buyers especially need to realize that you must negotiate within this deadline if you want to get your earnest money back in the event the deal falls through. If you negotiate outside of the deadlines, the earnest money can be lost.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.