You think your home is a castle but the appraiser thinks it is a shack!

What happens if the appraisal comes in lower than purchase price?

Despite rising interest rates, there are still many buyers, and it is still a good time to sell your home. Finding the right price point, though, is now more than ever super important, so you do not overvalue the home, and it sits on the market longer than necessary. Home prices continue to increase; however, they are a little slower now than what we have seen in the past months, and this increase in prices can also be a challenge to the seller.

Most buyers need a mortgage to finance their home purchases. The mortgage company sends an appraiser to the home to verify the value and condition of the home. Here, It can happen that the appraised value of the home comes in lower than asking price. What to do in this case? 

First, double-check with your REALTOR the pricing of the home, and if overpriced for the market with other comparable homes, it might be necessary to align the price accordingly.
Most buyers cannot afford to pay the difference in cash or simply do not want to pay more than the appraised value. 

If the review of the price point comes to the same result, it is possible to dispute the appraisal, or one can ask the appraiser if you can submit better comps, and she or he might adjust the appraisal value. 

In the end, if seller and buyer cannot come to an agreement on how to proceed, they can cancel the contract, and the seller can place the home back on the market. Still, it could come to the same outcome for the next buyer and the next appraisal. 

Any questions about this and other real estate-related contract issues? I am here to answer them for you. Please find my contact info below.