Are you a home seller who was hit with an appraised value of your house that came in lower than you expected? It most likely put a screeching halt to an impending sale. This will happen when you accept an offer only to have it negated with an appraisal on your home that comes in lower than the agreed upon price.
Since banks usually only lend enough money to purchase a home priced at or above the appraised value, the gap between the selling price and appraised price may stop the sale. The good news, there are ways to challenge your appraisal and possibly get the value back in line with your asking price.
If you are faced with a low appraisal on your home, use the following information to give you some ideas on how you may get a higher appraisal. One thing you should know before diving into these tasks is exactly how a home appraisal is done. Once you have armed yourself with the right appraisal knowledge, you can set forth on determining your home’s actual worth.
Review your appraisal
Federal law requires lenders to provide an appraisal within 30 days after you request it. Once you receive the appraisal, look for items the appraiser may have missed. One of the major factors appraisers use when evaluating a home is comparing it to similarly sold homes in the area. If a home nearby sold for the price you are hoping for, check to see if the square footage, bedrooms and bathrooms are comparable.
Make a case
Appraisals are not immune from human error. You should first get the buyer’s permission, then show the lender the discrepancies or other information you found that the appraiser did not consider. You can also ask for a second appraisal. There will be a cost to you for another appraisal but with new information for the appraiser, the result may be in your favor.
Go to the buyer
You should go directly to the buyer if challenging the appraisal does not yield results. The buyer may be able to come up with additional money on their own to put down on the home. The buyer may also ask you to lower the price of the home too, but at least you are in negotiations to sell the home which is better than having the agreement end after the appraisal.
It is a good idea no matter what stage of selling your home you are in to meet with a real estate expert to get an idea of what is happening with real estate in your local area. Being knowledgeable about every aspect of the real estate market will make it easier for you to sell your home quickly.