Published February 8, 2024
Strategies To Navigate Through Low Home Appraisals
This is how to deal with a low appraisal on your for-sale home.
Selling your home is a journey filled with excitement and anticipation, but it also comes with its share of hurdles, such as the home inspection and appraisal. The appraisal, in particular, can be a critical moment in the selling process, determining if the bank believes your home is worth the agreed-upon price. So, what happens if your home doesn't appraise at the value you expected?
Appraisals are, in essence, an expert's opinion on the value of your home, influenced by comparable market analysis and other factors. While we'd like to think of appraisals as purely objective, experience shows that there's a degree of subjectivity involved. Recognizing this can help you stay calm if the appraisal comes in lower than anticipated.
A low appraisal doesn't automatically mean the end of a deal. In Tennessee, for example, contracts typically allow buyers to withdraw if the home doesn't appraise without losing their earnest money. However, negotiation is key, and there are several ways to proceed:
1. The buyer might agree to cover the difference, ensuring the sale moves forward.
2. The seller could reduce the selling price to match the appraised value.
3. Both parties may meet in the middle, with the buyer adding extra funds and the seller lowering the price.
"A low home appraisal doesn't spell disaster for your selling process."
If you believe the appraisal missed important value-adding features of your home, you have the right to contest it. While it's rare for appraisers to change their valuation, presenting new, overlooked information could make a difference. Ultimately, finding a solution often involves figuring out who is most motivated to close the deal and how the financial gap can be bridged.
A low home appraisal doesn't spell disaster for your selling process. With the right approach and open lines of negotiation, there are paths forward that can satisfy all parties involved. Remember, the appraised value doesn't diminish the worth of your home or the viability of your sale. If you're facing an appraisal challenge or have any other real estate questions, please call or email us. We are always willing to help!
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