What Does it Mean for a Property ‘Not to Appraise’?

Dated: October 26 2021

Views: 12

A home’s true market value relies on the appraiser’s evaluation of the subject home and any comparable sales in the area. An appraiser’s fair market value is an independent evaluation of the property that most lenders take at face value.

What Options do you Have if a Property Doesn’t Appraise?

So what happens if the appraiser says the home is worth less than you offered? It’s a difficult situation, but you have options.

·       Renegotiate the sales price with the seller – Many sellers will renegotiate the sales price knowing that unless they find a cash buyer, they won’t get the higher price since lenders won’t lend more than the home is worth.

·       Pay the difference in cash – If you have the cash handy, you can make up the difference between the sales price and appraised value. This means you’ll pay more for the house than it’s worth, but sometimes if it’s a long-term investment, it’s worth it.

·       Walk away from the sale – If you don’t have the cash to make up the difference and the seller won’t renegotiate; you may want to consider finding another property that’s worth as much as you offered.

Should you Buy a House that Doesn’t Appraise?

The bigger question here is – should you buy a house that doesn’t appraise? While it’s a personal decision, you should weigh all the factors.

Ask yourself:

·       How long will you keep the home? Paying more for a home you’ll only own for a short Ime will likely end up with a loss.

·       Do you plan to fix the home up to increase its value?

·       Do you have the cash to invest in a home that you’re paying an inflated price for?

·       Will your lender approve it?

Final Thoughts

When a house doesn’t appraise it can feel frustrating, but there are ways to work around it. If you’re wondering how you’d handle the situation or you want a trustworthy real estate agent by your side helping you make these difficult decisions, contact me.

I’ve been in the industry for many years and have helped families through similar situations. While it’s not fun to find out a home didn’t appraise, you have options and I’m here to help you through them.

Blog author image

Dyanna Moon

I have been in love with real estate since I can remember. I love to spend my days working with amazing clients, marketing homes for sale, negotiating contracts and handing keys over to happy new hom....

Latest Blog Posts

What’s Going To Happen with Home Prices This Year?

After almost two years of double-digit increases, many experts thought home price appreciation would decelerate or happen at a slower pace in the last quarter of 2021. However, the latest Home

Read More

Waiting To Sell Your House? It Could Cost You a Small Fortune

Many homeowners who plan to sell in 2022 may think the wise thing to do is to wait for the spring buying market since historically about 40 percent of home sales occur between April and

Read More

Expert Insights on the 2022 Housing Market

As we move into 2022, both buyers and sellers are wondering, what’s next? Will there be more homes available to buy? Will prices keep climbing? How high will mortgage rates

Read More

Key Things To Avoid After Applying for a Mortgage

Once you’ve found your dream home and applied for a mortgage, there are some key things to keep in mind before you close. It’s exciting to start thinking about moving in and decorating

Read More