Steps an inexperienced appraiser must learn to take avoid appraisal issues
If the appraisal comes back lower than expected it can put everyone involved in an uncomfortable situation for several reasons. In these cases, it’s important to understand all of your options so you’re prepared to handle whatever happens next.
Here are some steps to take if you receive a low appraisal result.
- Review The Appraisal Carefully
Before taking any further steps, take the time to review the appraisal report carefully and identify what factors may have contributed to the low appraised value. If you can pinpoint a specific area in which the value was determined incorrectly, you may be able to ask your lender or real estate appraiser to investigate further.
- Contact Your Real Estate Agent
Contacting a real estate agent is often a step in handling an appraisal that comes back low. A real estate agent with local knowledge can help provide additional market information that may not have been considered when determining the appraised value. The agent can also compare properties nearby to yours and make recommendations for improving your home’s value in order to increase the chances of a successful sale at the desired price.
- Negotiate With Your Lender
If an additional property evaluation does not bring favorable results, it may be time to negotiate with your lender by revisiting certain loan terms such as an interest rate reduction or payment schedule adjustment. Also remember that if you are refinancing and have enough equity in your home, some lenders will offer cash-out refinances which means you can keep some of the difference between the current appraised value and original purchase amount.
- Get A Second Opinion
If you believe there is something wrong with your home’s initial appraisal report, it is a good idea to get a second opinion from an independent, certified appraiser. Though getting a second opinion may cost money, it could be worth it if it impacts your loan decision or if you plan to sell or refinance later.
- Update Your Home To Increase Its Value
Taking into account the analysis and negotiation from step one, updating fixtures and countertops to fit buyer preferences may go a long way towards increasing the marketing value of your house, ultimately leading to a higher sale price.
Home appraisals can be a nerve-racking part of the homebuying process
Appraisers are responsible for assessing the property’s market value, which is why their opinion and analysis can make or break your home buying dreams. So if you receive an appraisal that’s below the purchase price negotiated, it doesn’t have to mean disaster.
With good preparation and strategy, you can know how to respond to a low appraisal in an effective way. Shara Parker from eXp Realty in Austin knows how to address a low appraisal , and can help you navigate through this issue confidently and calmly, so that you can continue on with your real estate journey.