Friday, September 24, 2021 / by John Salkowski
Here’s what happens if the appraisal is lower than the contract price.
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What if your property doesn’t appraise at contract price? In this red-hot seller’s market, we always negotiate upfront with the buyer and the buyer’s agent about how much they’re willing to pay above appraised value. We’re seeing appraisals come in at a lot less than the contract price.
For example, if the contract price is $300,000 and the appraisal comes in at $280,000, there is a $20,000 disparity. We need to know how to handle this.
If the buyer is not willing to submit an addendum clarifying this, then renegotiation starts. Generally, the buyer comes up a bit, and the seller comes down a bit to meet in the middle. If they can’t agree, the deal is terminated, and we move on to the next buyer.
If you have questions about how we handle low appraisals or anything else related to real estate, give us a call. There is never any cost or obligation when you do so. We’re just here to help.