What Happens If Appraisal Comes in Low?

What Happens if Appraisal Comes in Low?

Is the deal completely dead if the value of an appraisal comes in below the agreed upon price?

No, it’s not dead. There are still some options and ways to keep the deal alive.

The first option is for the seller to agree to reduce the price of the agreement to the appraised price.

This is the simplest avenue, but not all sellers are agreeable. We see sellers become even less agreeable in hot seller markets.

The second option is for the buyer to make up the appraisal difference.

A buyer could make up the difference by bringing additional funds to closing, but can sometimes also be able to adjust the percentage the buyer is putting down without requiring them to bring additional funds to closing.

The third option is a mix between the two where the seller agrees to reduce the sales price and the buyer brings additional funds to closing. As an example, if there was a $20,000 difference between the agreed upon value and the appraisal then the seller would agree to reduce the price by $10,000 while the buyer brought an additional $10,000 to closing.

The fourth option is terminating the deal and all parties moving on. If this is the case and the buyer had a mortgage contingency and all dates were met in the mortgage contingency then the buyer would (most likely) get their deposit back.

https://www.boston2.com/blog/what-happens-if-appraisal-comes-in-low/

Jeffrey Chubb | Chubb Homes Team | 617-480-2600 | Jeff@Boston2.com | www.Boston2.com | Brokered by eXp Realty