Everything that Happens When an Appraisal Comes in Low
Here’s everything that happens when an appraisal comes in low.
What happens when an appraisal comes in low? Based on how the market is, we expect everything to go smoothly from the seller’s perspective, but a low appraisal can jam things up. Today, I’ll go over what the seller needs to know when the appraisal comes in low.
First things first, every buyer has the right to an appraisal. If a lender is involved, they will likely require an appraisal, so you need to be prepared. If a lender isn’t involved, an appraisal is up to the buyer’s discretion; however, just because they are buying cash does not mean an appraisal is automatically off the table.
So, let’s say an appraisal happens, and it comes in low. This means the appraisal value is less than the purchase price. In this case, the buyer has the right to move forward with the contract and pay the agreed-upon price. If this happens, the low appraised value has no relevance. If a lender is involved, they can opt to pay the difference to meet the asking price.
“Even if you agree to sell for the low appraised value, the buyer can opt out of the contract.”
If a home appraises low, does it need to sell for its appraised value? In short, no. Both parties have the right to terminate the contract. Even if you agree to sell for the low appraised value, the buyer can opt out of the contract. Maybe it was because something in the inspection spooked them, or maybe they’re just experiencing common buyer’s remorse. Either way, there’s no guarantee of a sale.
What do you do in this situation? In a future video, I'll go over everything you can do as the seller if an appraisal comes in low. In the meantime, if you have any questions about today’s topic or anything else related to real estate, do not hesitate to reach out to me. I am always willing to talk.