Navigating Low Home Appraisals: 4 Strategies for Buyers

4 Ways for Buyers To Deal With a Low Home Appraisal

1-Challenge The Appraisal

It will take work to appeal what you believe to be an unfair evaluation successfully, but it is possible.

You'll need a copy of the appraisal report to contest the appraisal.  "In this manner, you can check the specifics and discover verifiable proof of any calculation error. If errors are found, it always works.

Contradictions and errors occur more frequently than you may imagine.

There are occasional errors in the processing, such as failing to include specific sources of income or using incorrect comparables." If you can back up your claim with proof in certain situations, it might be feasible to have the appraisal reviewed and the outcome amended.

While mistakes can happen, the success rate of appeals is generally low, as appraisals are typically conducted by licensed professionals and are based on objective criteria.

2-Request a second evaluation for your home.

Ordering a second appraisal is an option if the previous one needs to be more accurate. But you'll pay for it.

To get a second assessment, remember that you will be responsible for the cost of a second appraisal; the lender will require you to complete a "reconsideration of value" form. The lender might not be able to accept your request.

3-Renegotiate with the home seller when the appraisal comes in lower.

The most straightforward and likely approach is to reach a common understanding with the home sellers.

Negotiating the sale price with a seller is simpler than seeking a second appraisal. Homeowners will find it difficult to sell their property for more money than it is worth. Most sellers will lower their asking price to sell their homes if the appraisal is accurate.

Renegotiation can also help to bridge the gap between the appraised value and the accepted offer. 

However, the home sellers are not required to renegotiate and might not be prepared to drop the asking price.

4-Cut your losses and move on; walk away.

When you walk away from your dream house, it can be emotionally taxing and have financial repercussions. It can frequently feel like a divorce. Abandoning the acquisition would be a harsh measure that should be carefully evaluated. On the one hand, it can prevent a scenario where the customer is forced to make a much more expensive purchase.

You may sometimes need more funds to bridge the gap between the appraised value and the purchase price, leaving you with limited options to address the situation except to walk away. Please always do what's best for you and your situation.