what if my house does not appraise for the selling price?

Asked by Christel18, East Brunswick, NJ Wed Jul 1, 2009

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Jessica Hood…, Agent, Gambrills, MD
Wed Jul 1, 2009
The bank will only loan your buyer the appraised value, or a percentage of the appraised value. So if the home under appraises there are only three options (1) you as the Seller can reduce the price to appraised value (2) the buyer can pay the difference in cash at closing (3) either party can usually cancel the sale (buyer on financing and seller because sale price wasn't met). However, it's critical to know what type of appraisal you received. If it was FHA or VA, they stay on file for 6 months and any buyer looking to borrow on that property is locked at that value. i.e. your house is locked at that value. The most likely outcome at least in our area is that the seller reduces the sales price to the appraised value.
1 vote
Michael Aust…, Home Buyer, Henderson, NV
Thu Aug 15, 2013
The best answer is::: You can appeal the appraisal--- Because in this changing market (going back up) the appraisers are affraid to really dig and look at the market. If they don't, we'll be in the same low prices because they are only basing their decisions off of forclosures and short sales.
0 votes
Keith Sorem, Agent, Glendale, CA
Thu Jul 2, 2009
Based on just the agents in my office, I would say that it is not a question of IF your home will not appraise. It's a question of WHEN.

You have some very good answers here. The bottom line is that if you need to sell, you are going to have to aggressive. I would talk with your listing agent about perhaps REQUIRING the buyer to CO-APPLY with another lender so you have TWO tracks going. Chances are your Realtor knows of a good lender that might be able to help because they have a little more structure in the appraisal department.

Below are two great links to articles about appraisal issues in the WSJ
0 votes
AL BRENT, , Rocky River, OH
Wed Jul 1, 2009
If your house does not appraise for the selling price, usually there are three options.
No. 1 The buyers can raise their down payment by the difference of their current down payment and the difference in the appraisal. i.e. Selling Price $200,000 Appraisal $190,000. Buyer adds $10,000 to Down Payment.
No. 2 The Seller can take less. In the above example the seller can accept $190,000.
No. 3 Buyers and Sellers can split the difference. This does not mean they must split 50-50.
No. 4 SOMETIMES (in the past-before banking changes by this administration) the Seller can carry a note for whatever difference Buyer and Seller can agree on.

That's 4. But there are others. My list includes the most common ways to overcome a low appraisal.
0 votes
Raj Rajpal, Mortgage Broker Or Lender, STATEN ISLAND, NY
Wed Jul 1, 2009
Depends on terms on the contract and also your buyers downpayment, if it is a low downpayment they may get denied for the mortgage and come back to you to renegociate the price of the house again.
Web Reference:  http://www.rajmortgage.com
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