What If You Price Your Home and the Appraisal Comes in Lower?
When it comes to selling your home, pricing it right is a crucial step. You want to make sure you’re asking for a fair price that reflects your property’s value while also attracting potential buyers.
However, there is always the possibility that the appraisal may come in lower than your asking price, which can create complications and cause you to reconsider your selling strategy.
If this happens, it’s essential to stay calm and take a rational approach to the appraisal. Here are some things you should consider if the appraisal comes in lower than your asking price:
- Understand the Appraisal Process An appraisal is an evaluation of your home’s worth by an impartial third-party appraiser. They will look at various factors such as your home’s location, size, condition, and recent sales in your area. It’s important to understand that the appraisal process is not an exact science, and there is always room for interpretation.
- Analyze the Appraisal Report Take a close look at the appraisal report and review the appraiser’s methodology and the comparable properties used. If you notice any discrepancies, you may want to speak with the appraiser and provide additional information or evidence that supports your asking price.
You are patiently waiting for an offer…a few buyers come and go…then you get an offer for $650,000. You are a little disappointed so you counter the buyer back and settle at $680,000… Inside you are probably doing a little dance of joy and if asked could do cartwheels on the front lawn.
The Bank Appraiser Cometh
Then, the buyer’s bank sends out an appraisal and the home An evaluation is going to take into consideration the subject property’s square footage….usually 100 square feet less and 100 square feet more in the same type of neighborhood.
So, your property has 2,000 square feet. That means that the square footage range would be between 1900 to 2100.
The appraiser will then search all of the most recent sales within the last six months in your neighborhood and similar areas. Their goal is to find three of the most comparable SOLD properties.
The appraiser informs the bank that based on the most recent similar home sales is valued at $650,000.
What do you do now?
Well, you have a couple of options:
Get stressed out
Order your own appraisal
Get a copy of the appraisal and ask the appraiser about the comparable properties that he used
Lower the price to the appraised value
Decide to lease the home out instead
Stay in the home
