Selling your house in 2022 can seem like you have a lot to leverage, but there are still obstacles to overcome to ensure a smooth transaction. Let’s look at the most significant obstacle that can stand in your way, low appraisal. We will be discussing 3 things to do if your house gets a low appraisal.
What is the importance of an appraisal?
We must first understand what appraisal is and how it affects our business.
An appraisal reviews and assesses your home’s condition and features to determine its fair market value. An appraiser is trained in how to take into account these features and then look at market trends to determine the estimated market value. Your property will be appraised in a comprehensive manner.
You’re in trouble if your buyer offers an exorbitant price and you get a very low appraisal. This is because the buyer almost certainly wants to get a loan from a mortgage lender for a home. If an appraiser tells the lender that the property doesn’t have a value, the lender won’t approve the loan.
If the buyer defaults on their mortgage payments, the lender may be left with a property of lower value. In this scenario, the buyer loses their loan, has no financing, and the sale of your home is canceled.
Go Through the Appraisal Report
We now have a good understanding of what an appraisal is and its purpose. What do we do if it comes back low?
You should carefully read the entire report, regardless of the appraisal results. To ensure that there are no errors and that your home is accurately represented and analyzed, you should carefully review every detail.
If you feel something should be valued higher or lower than what the report says, you won’t have much to argue. However, you can certainly dispute the report if it contains obvious errors.
Request a Do-Over
You have the option to request a second appraisal by another appraiser if the first appraisal is not satisfactory.
If there are questions about the first appraiser’s competency, experience, and qualifications, this route is often taken. This is the time to go all out and prepare your home to its best.
Do a thorough cleaning of everything and make any necessary repairs. Hopefully, the numbers will improve.
Let’s suppose that both your appraisal reports are correct, but there is still a significant value gap. The buyer has the option to pay the difference between their appraisal and the offer, but it is not a common solution. What should you do?
While it can be awkward, the failsafe is the fastest way to turn things around.
It is possible that it will not happen as there will be another buyer willing to take over. However, if necessary, you can always lower the price to something the buyer can afford.
Help when you get a low appraisal for your South Florida property
Low appraisals can be frustrating. But you can still get help from our skilled professionals by calling 954-278-9353