What if the Appraisal Comes in Lower than the Accepted Offer?

What if the Appraisal Comes in Lower than the Accepted Offer?

You have an accepted offer on a house for $600,000. You have put down 25%. The appraisal comes in at $580,000.

What do you do?

First or foremost, your options will depend on how your contract is structured. If you’re able to cancel the contract if the home doesn’t appraise you will have four options.

1. Come up with the $20,000 difference out of pocket and move forward with the purchase
2. Ask the seller to reduce the price down to the appraised value of $580,000
3. Sell if the seller will meet you in the middle, they come down $10,000 and you come out of pocket with $10,000
4. Cancel the contract

If you are in a strong seller’s market it’s not uncommon for homes to not appraise and you may have no leverage to negotiate. However, if you’re in a buyers market you might have more leverage with the seller and they may be willing to come down to the $580,000.

You can always try to fight the appraisal, just keep in mind you need the home appraiser to basically state they didn’t do their job, made a mistake, and will change the appraisal. Your lender may be willing to allow a second appraisal, at your expense, but even if it comes in at value they may not throw out the first appraisal. You may also be able to change lenders, start a new file and have a new appraisal.

This is where a top Realtor will be able to guide you through the process and discuss “best options” with you.

What if the Appraisal Comes in Lower than the Accepted Offer?