Most sellers are fair and will work with you.
I just recently had my buyer's appraisal come in lower than their offer price --- the property is absolutely perfect for them, especially after seeing so many other properties and knowing they couldn't find anything better.
We also knew this appraisal was not perfect especially since the appraiser is from out of town and couldn't possibly have known the nuances of the area. But we are also aware of what an uphill battle it would be to challenge the appraisal. And everyone is running out of time due to moving dates for both parties. So we approached the seller who agreed to meet the buyers half way. All's well that ends well. It helped that both agents were dealing from a win-win angle and didn't turn this transaction adversarial.
Hope your final outcome will be the best one for all. Good luck.
I bid 5.5% over asking and ended up being the backup offer. The people with the winning offer ended up backing out, and so we were offered the deal.
I have a week and a half until my appraisal, and then we have to wait for the report. It really helps to get opinions from the experts so I really appreciate all the answers. At this point all I can do is wait and keep telling myself that it's out of my hands (which drives me batty)!
I you simply picked a figure that you thought would be a winner, you may have a problem. The appraiser needs to base the value of the property on comps. I you are willing to pay more than anyone else has been willing to pay for a comparable house in that neighborhood you may need to come up with cash to bridge the gap between your price and the appraisal valuation. If you canâ€™t do thatâ€¦wellâ€¦that is why the contract contains an appraisal contingency. You will not be contractually obligated to make the purchase as long as the appraisal contingency is in effect.
Pacita has laid out the three potential that you might follow in her comment below.
I have seen many appraisals fall short of what a buyer has offered. I have also seen appraisals that came in at the sale price even when the price was surprisingly high.
I know this is a challenging market for buyers. I hope you are successful.
It is important to speak with the mortgage broker / banker and find out what appraiser company or appraisers they work with.
You have options, depending on the results of the appraisal. If property appraised for less than your offer, you can negotiate with the seller
1. Ask seller to lower price per appraisal
2. Offer to meet seller halfway and reduce price accordingly
3. If there is no meeting of the minds, you can either walk away or come up with the difference
You can have a second appraisal or challenge the one you have (although that may be an uphill climb)
And yes, many appraisers are adjusting to the market.....and as properties close escrow, they may reveal several situations where the sold price is higher than list price....and therefore, "lift" some of the values to reflect current market trends
You would know where you stand.
Look at it this way;
The Appraisal will be protecting you from paying too much.
You do have an APPRAISAL CONTINGENCY? right?
YES! a lot haven't met the appraisal.