Home Shoppers Guide to Dealing with a Low Appraisal
What can you do if the home you’re making an offer on doesn’t appraise? You have options, and I want to go over each of them with you today:
- Renegotiate the price. In today’s hot seller’s market, this option has become very rare. Not many sellers are willing to negotiate their price down.
- Pay the difference out of pocket. Buyers can pay the difference by bringing extra cash to closing. If you’re working with a great lender, you can also plan ahead by increasing your loan-to-value ratio. This way, you can put less money down to make up the appraisal gap. You might have to pay private mortgage insurance, but PMI is the cheapest it has ever been right now.
- Dispute the appraisal. This would either be based on material issues the appraiser missed, such as square footage, or marketable materials you believe were undervalued. Try to come up with at least three comparables in your appeal to make the best case possible. I have a checklist available to help you properly dispute an appraisal. Just click this link to download it.
If you have questions about your options or anything else, please call or email me. I would be happy to walk you through the dispute resolution process.
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. CrossCountry Mortgage, LLC (“CrossCountry”) does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by CrossCountry.