What Happens if the Appraisal is Lower than the Offer?
What happens if the appraised value of the house you’re selling comes in too low?
In addition to ensuring there are no safety hazards at a home, the bank appraiser is also making sure that the home value is at least what a buyer and seller agree too. This isnʼt always possible though. If an appraiser determines the value of the subject property is lower than the agreed purchase amount, there are a couple different scenarios.
- Seller makes Concessions
This is the most common result when an appraisal comes in too low. The seller must agree to sell the home for what the appraiser determines as the acceptable value.
- The buyer must bridge the difference between the purchase price and the appraised value.
This scenario is fairly uncommon as many buyerʼs find it hard to pay more for a home than their bank appraisal indicates itʼs worth.
- The Transaction is Cancelled
Unfortunately for both the seller and buyer, this is a common result from a property under appraising. If the buyer does not want to bridge the difference and the seller does not want to make the concession and adjust the sale price, the transaction is cancelled.
But how about challenging the appraisal? Challenging an appraisal is not an easy task. It is something that must be done with much care and consideration, otherwise the chances of an appraised value being changed, is slim.
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