Low home appraisals

I welcome your questions about how to respond to when appraisals come in below an agreed-upon sale price.
  • June 05 2013 - Vienna
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Answers (4)

To avoid having an appraisal coming in lower than the asking price, first have the listing agent meet the appraiser at the property and provide them with comps and point out upgrades to the home and any other facts that might affect value.

Second, if the appraisal comes in lower you can get a second appraisal before agreeing to a price reduction.

  • June 05 2013
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Profile picture for Jonathan Kirk
For me, when this happens it always depends upon the buyers agent and listing agents relationship. I currently am on the buy side of what was an fha buyer and the appraisal came in $29k Light! Sales price of $155k. The listing agent and I have a really good relationship and this is our first transaction together. WE (All parties) came together and decided to go with another lender and go conventional and it worked! The second appraisal through a different lender and appraisal management company came in at $158k! $3k over the sales price! That's a $33k swing...just got the clear to close today!

Agents coming together will always be more advantageous for all parties involved instead of having a set approach on how to deal with a low appraisal. All parties thought the house was really worth the $155k (especially my buyer) so we chose to move in another direction. With conventional deals having such low down payments these days (5%, sometimes lower), anything is possible when both sides come together and it doesn't hurt if there is a little more $ available from the buyer.

Using good comps to justify your offer from the start before you place your bid is going to be a good move too. In the end, we cannot control the appraisers, but we can always do our own research and come together to present it in the best way possible so that others who disagree, could possibly reconsider or make some adjustments due to your efforts.
  • June 05 2013
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Great answers!  After the house is under contract remove the normal lockbox and replace it with a custom lockbox so buyers can inspect the home because you give them the keys but appraisers have to call to get in.  That's your chance to meet them an give them comps.  They love comps especially when they are often from 30 to 50 miles away because of these appraisal management companies and the appraisers had to take a cut in pay so they like all the help they can get

J.D."Dan" Weisenburger,GRI
Broker-Assoiciate
Realtor®
[Contact information removed by Zillow moderator. Please see our Good Neighbor Policy for more information.]
  • June 06 2013
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Here's an (LONG) article I wrote on the topic of dealing with low appraisals and how Realtors can work with appraisers to avoid these problems. [Hotlink removed by Zillow moderator. Please see our Good Neighbor Policy for information.] I hope you find it useful!
  • November 22 2013
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