What if my appraisal comes in low?
What happens if your appraisal comes in too low? Alright, you're buying a house and the appraiser comes out and he says, “It's not worth what you bought.” Let's say you bought it for a million bucks and you haven't closed it yet, but the appraiser comes through and says, “Yeah, yeah, sorry. It's actually only worth 950 based on my evidence of what the comparable sales are in the neighborhood.”
What do you do? Well, there's a couple of things you could do.
Tips on how to deal with low appraisal
One is you can pay the difference because here's the thing, a lender's going to give you a loan, not based on what you decided to buy it for, but based on what it appraised for. So if you want to take an 80% loan of a house that you want, but the appraiser only thinks it's worth 950 and you are in for a million, there's a $50,000 gap there.
Another thing you can do is go back to the seller and say, ”Yeah, remember that million bucks that I told you I'd give you? Yeah, I kind of just want to give you a 950 now because the appraiser said so.”
The thing about that is that most sellers in a competitive market will tell you to pound sand because they can just go to the next buyer and get a million bucks from them.
The third thing you can do is offer to split the difference with the seller. Maybe it's a kind of a neutral market. Seller doesn't want to lose the deal, and they're willing to come down and say, I don't know, $25,000, and you can come up $25,000 and you guys can meet in the middle, and everybody goes home happy.
So having a low appraisal is not a death sentence.
There are ways around it. And when the market gets kind of funky and there are different opinions of value, say the buyers think it's this, the appraiser thinks it's that. This happens more than you might think.
