Whether you are a home seller or looking to buy, a low home appraisal could cost your deal to fall through.
Here’s a common scenario: You list your home for $350.000, you receive an offer of $275.000, you end up setting at a price of $300.000. An appraisal is done before closing and it comes in at $255.000. That’s $20.000 less than what the seller offered and $95.000 less than what you expected to receive. Not to mention that the $255.000 appraisal price is the maximum amount of which the lender is willing to lend.
Now, $35.000 is hanging in the balance. Does the seller pay the difference in cash? That would mean they have the extra cash laying around and are willing to pay above the appraised value of the home (not likely). And after you’ve already come down on the price in negotiation with the seller, you may not be willing to come down again so drastically.
Needless to say, the deal is shot and its back to the drawing board for you both.
Here are a few steps that could save you from the aforementioned scenario as a buyer or seller:
If you are a buyer, have your lender hire an appraisal from your county or neighborhood. An appraisal familiar with your area and knowing your area well could mean life or death to your deal.
Make sure the appraiser is qualified. Your appraiser should be certified by the state’s national board of real estate appraisers. An appraiser who belongs to a professional organization such as the Association of Georgia Real Estate Appraisers (AGREA).
Provide any information regarding your home, the neighborhood, and any recent comps you know of. This information won’t promise to change your appraisal value but it could be welcomed by your appraiser. The more information, the better.
As a seller, consider obtaining a pre-listing appraisal before you even list your home.
A pre-listing appraisal will provide you with a much more realistic market value and could save you from wasted time, energy and money in the future.
Low appraisals are typically seen during a declining housing market because of the lack of comparable homes in the area. Not having “comps” to compare your home to makes it difficult to determine the most accurate true market value. When the market is slow, good comps age fast, and with a rise in foreclosures, can result in appraisers have a hard time justifying the price you set.
To get in touch with an appraiser in your area or for more information click on one of the areas below closest to you:
Alpharetta|Brookhaven|Buckhead|CobbCounty|Dekalb County|Dunwoody|Fulton County|Gwinnett County|Marietta|Sandy Springs
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