The appraisal came in low. Now what?
First things first: don’t stress! Take a deep breath and remember, an appraisal is good — it’s there to keep you from overpaying on a home.
So what to do when the number is smaller than your purchase price? Here are your options:
A low home appraisal can potentially ruin your chances of successfully refinancing your home in the future.
Ask for a second appraisal
Asking for a second appraisal will give you options! There are a lot of positives for getting a second appraisal. One being that a home’s value often increases, so to protect your investments, an up-to-date appraisal is needed for your own piece of mind.
Negotiate the purchase price with the seller
Negotiation always brings the deal one step closer to the overall target for both the seller and buyer. Communicating about price allows compromise between both parties.
Find more cash to bring to the table
Bringing more cash to the table is quite appealing to the seller overall. There are less risks than with mortgage-contingent offers, and it gives them the idea that they want to close the deal much faster.
Now, sellers, listen up; unless you’ve got a cash offer, a low appraisal could be a full stop to your selling plans. Help your home appraise for top dollar by taking into account these steps:
Provide the appraiser a list of your offers
Showing the appraiser that there are numerous offers not only proves the price, but it can increase the competition for your home in the long run. Once the appraiser accepts, the buyer will notice that there are multiple offers. So, they are more likely to put in an offer as well.
Clean and declutter to have your home looking its best
Cleaning, decluttering and even renovating your home will definitely begin to increase the appraisal a tad. The value of the home could potentially increase.
Be present at the appraisal to point out your home’s features (subtly, of course!)
Explaining all of the great features and amenities of your home during the appraisal can also increase your home’s value. The more features you have, such as a mud room, coffee bar, finished basement, etc.,the higher the chance this appraisal will benefit you and your home in the long run.
These are just a few tips and tricks of managing appraisals from both ends. If you need more information regarding your home’s property value and overall performance, click here.