The Home I’m Buying Didn’t Appraise, Now What?

One of the most popular questions home buyers ask is “what happens if the home I’m buying doesn’t appraise?” and it’s an excellent question. First and foremost home buyers need to understand appraisals are an “art,” not a “science,” so there are no set adjustments appraisers make. There are homes with supporting comparables that should appraise but don’t. Then there are homes that don’t have a single supporting comparable and probably shouldn’t appraise but do. So home buyers need to understand there are no guarantees when it comes to an appraisal.

The Home I'm Buying Didn't Appraise, Now What_

So what happens if the home you’re buying doesn’t appraise?

Seller Reduction

Asking the seller to reduce the contracted price to the appraised price is the first option most buyers try. Now, if it’s a good appraisal and shows true market value some sellers will come down in price. However, if the seller feels it’s a bad appraisal they might not budge.

Low Appraisls can cause a standoffPay the Shortfall

If the seller won’t budge the buyer can always pay the shortfall, which means in addition to paying their original down payment and closing fees they will also have to come up with the shortfall.

Example; if the contract price is $400,000 and the home appraised for $380,000 the buyer would have to bring an additional $20,000 to closing. Not all home buyers are in the position to come up with the shortfall, so even if the seller won’t cover the entire shortfall there may be other options.

Meet in the Middle

Another option is for both parties to meet in the middle. Now, it might not be the exact middle of the shortfall, but the seller will come down and the buyer will come up, so neither party has to cover the entire shortfall.

Cancel the Contract

The last resort for some home buyers is to cancel the contract, if the contract allows. Now, the buyer will be out the money they already spent for the appraisal and possibly the inspection and/or any applications, but they won’t be forced to pay the shortfall and in most cases will get their escrow deposit back.

Final Thoughts

I’d like to say buyers and sellers shouldn’t worry about an appraisal and why they certainly don’t have to stress out wondering if it appraised they need to be aware of a low appraisal and what that will entail. As mentioned above there are homes that should appraise, but don’t and homes that shouldn’t appraise and do.

Please consider spreading the word and sharing; The Home I’m Buying Didn’t Appraise, Now What?

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About the Author

Top Wellington Realtor, Michelle Gibson, wrote: “The Home I’m Buying Didn’t Appraise, Now What?”

Michelle has been specializing in residential real estate since 2001 throughout Wellington Florida and the surrounding area. Whether you’re looking to buy, sell, or rent she will guide you through the entire real estate transaction. If you’re ready to put Michelle’s knowledge and expertise to work for you call or e-mail her today.

Areas of service include Wellington, Lake Worth, Royal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres, and more.

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Michelle Gibson Wellington Florida REALTORMichelle Gibson of the Hansen Real Estate Group Inc is a full-time REALTOR who has been specializing in Wellington Florida real estate since 2001. This veteran of the real estate industry has expertise in technology, marketing, and social media.


Hansen Real Estate Group Inc. is a full-service real estate brokerage specializing in residential real estate. As a customer-focused, quality organization, we achieve success one client at a time. Call 561-333-0446 or e-mail me today at [email protected]

Michelle Gibson and Hansen Real Estate Group Inc fully support the principles of the Fair Housing Act and the Equal Opportunity Act. Accessibility Statement


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