As a seller, what do you do if your home’s appraisal comes back less than its contract price?
Before I answer that question, there are a couple of things you should know. For one thing, we don’t run into this situation very often in our market. Also, traditional home sale contracts in our area include appraisal contingencies, which state that the appraisal has to be at least the value of the contract price or higher—it shouldn’t be low.
If it does come back lower than the contract price, you have a few options. First, you can check the appraisal itself for errors. Perhaps the appraiser miscalculated the home’s square footage or used bad comparables. By “bad comparables” I mean they chose homes to compare yours to that aren’t like yours or aren’t located in the same area.
Second, you can reach out to the lender to ask the appraiser for a reconsideration of value. If you do this, you’ll have to provide new comparables you think are better than the previously used ones.
The third thing you can do (and one I would recommend doing) is send the appraiser a list of improvements you’ve made to your home since purchasing it.
If none of these work, your last option is to renegotiate with the buyer. You’ll have to go back to the drawing board and see if you two can come to an agreement on a new value. It’s not an easy process, but it can be done.
As always, if you have questions about this or any real estate topic, don’t hesitate to reach out to me. I’m happy to help.