Tuesday, November 1, 2016

Options When Your Appraisal Comes In Low

I'm in the midst of a low appraisal right now. It's a beautiful home. The comps that I evaluated with my clients showed that what we agreed to was a fair price. The appraiser didn't think so.

This problem is a mutual problem for buyer and seller but the argument for the value falls on the listing agent.

You have a few options on how to deal with a value problem, we're selecting the fight the value with appraiser option.

A real estate purchase agreement generally gives the buyer an appraisal contingency. If it doesn't appraise at agreed to purchase price, buyer can cancel the contract without penalty.

Now, most buyers and sellers want a contract to stay together. That's why the buyer made the offer and seller accepted, right? Buyers want to buy the home, Sellers want to sell the home.

Options if the appraisal comes in low ~

1) Seller reduces purchase price.
2) Buyer brings in extra cash to close.
3) Split somewhere in the middle, or a variation there of.
4) Cancel the contract, which leaves the Seller with a BOM (Back On Market, Ugh)
5) Dispute the appraisal.

Since the listing agent, buyers, sellers, and myself, all see the value on the purchase price....we've elected to dispute the appraisal.

I've seen the appraisers report, she used some odd comps, didn't use others. So, listing agent is preparing a mathematical argument to the appraisers value. Bringing in comparable sales that are more appropriate, noting the upgrades, or lack of, with each property.

The listing agent has been selling in this particular community for 30 years. I would have to call her and her partner experts in this particular market. They've listed, sold, or viewed, the majority of what is for sale or sold in the neighborhood.

It's taking time, but the fight is worth it. My peeps want the home, listing agents peeps want to sell the home.....the appraiser my stick her ground, but it's worth the fight for sure!

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