Options for Sellers Whose Homes Don’t Appraise

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If you’re a seller, what happens if your house doesn’t appraise?

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What happens if your home doesn’t appraise?

Here to help me discuss today’s topic is Steve Stork of Summit Funding. Steve has been working with us for about 10 years, and we consider him an expert on this subject. Together, we came up with a list of things that can happen if your house doesn’t appraise:

  • We can split the value.
  • We can ask the buyer to bring cash.
  • We can lower the price and then close.
  • We can choose not to close. More often than not, you’ll see a section on an appraisal report entitled “pending sales,” which refers to the comparable homes to yours that, like yours, are under contract. Because they don’t yet have a sales date, pending sales are not given any weight in terms of the value of your property. So, by calling that listing and finding out where these pending sales are in the process may give you some insight into a potential comparable you can add to the mix once it closes. At that time, you can send the appraiser back out to the home to reinspect the property and use the comparable to help calculate the overall sales value.
  • We can wait for more comps to sell if prices are going up.
  • We can also refute the appraisal if the buyer will cooperate. If you have any additional comparables the appraiser might have missed, you could bring those to the attention of the appraiser, possibly earning some value for your property.
  • We can ask the buyer to reapply with a different lender.
  • If it was an FHA appraisal, the appraisal sticks to the property for four months. Unfortunately, there’s no way to dispute that appraisal; you just have to wait until that period is over and to take another FHA offer.

 

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Because they don’t yet have a sales date, pending sales are

not given any weight in terms of the value of your property.

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If you have any questions for us, feel free to reach out. We are here to add value to your real estate experience.

What Happens if the House You’re Buying Doesn’t Appraise?

Posted by Toth Team Worldwide on

What should you do when the house you’re buying doesn’t appraise?

Want to Buy a Home? Search All Homes

Want to Sell a Home? Get a Home Value Report

 

If you’ve found the perfect home and submitted an offer, what happens if the property doesn’t appraise? Well, first of all, don’t lose hope. There are many ways a deal can still proceed even after an appraisal comes in low, and here are just a few:

  1. Ask the seller to lower the price.
  2. Pay the difference in cash.
  3. Get a new lender (and a new appraisal).
  4. Refute the appraisal.
  5. Wait for comparable properties to rise in value, then order another appraisal.

 

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Our team will do everything we can

to help arrange a solution.

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Of course, each of these options would need to be approved by a lender. The good news is that appraisals don’t come in low very often. If and when they do, though, our team will do everything we can to help you arrange a solution.

As always, if you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

Myths & Facts About Ann Arbor Home Appraisals

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When it comes to selling your home in the Ann Arbor area, you’ll be faced with tons of paperwork, home inspections, and a home appraisal. Often you won’t fully understand the process, which is why the home appraisal is one of the most hotly disputed parts of the process. Homeowners can feel that the bank or lender is trying to help the buyer rather than them — since their home is being judged on quality and value. To help separate fact from fiction, here are some common home appraisal myths debunked:

Downtown Ann Arbor MI

Myth 1: The Appraisal is Designed to Help the Buyer

One myth is that the main purpose of an appraisal is to ensure the buyer does not pay more for the house than what it is worth. In fact, the appraisal is meant to protect the lender. Lenders do not want to own an overvalued house any more than they want to give money for one. They want the best value like all other consumers.

Myth 2: Appraisers Use Formulas to Decide Home Values

Another myth is that appraisers use specific formulas like price per square foot to determine property value. In actuality,appraisers take several factors into consideration to judge a property. These factors include the property’s size, lot area, and the proximity of desirable community facilities such as good schools.

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Myth 3: Clean Homes Get Better Appraisals

Realtors who want to sell might put in a lot of time “staging” the property. Staging means putting up new curtains, ensuring the house is swept and dusted, and using furniture to enhance the appearance of the property. The fact is, this does little to improve the appraisal of the house. Appraisers are trained to look for structural details, such as paint cracks, secure sink and lighting fixtures, and the condition of floor boards or carpeting.

Myth 4: Anyone with a Clipboard and Business Cards can be an Appraiser

If you think anyone can be an appraiser, consider this. Each state has minimum requirements to become a property appraiser. In Ann Arbor, each appraiser must pass an exam and pay a licensing fee in order to become an appraiser. Some trainees have to complete 2,000 hours of supervised experience before they can be their own appraiser.

The Home Appraisal & Selling Your Home

If you’d like more information about the home appraisal or selling process in Ann Arbor, contact us or read our free home seller’s eBook:

Home Sellers eBook