Appraisals-and what happens if the house you are buying or selling does not appraise.
With the recent shift in the market many home buyers and sellers are a little unsure of the property values. Unlike a few years ago a when appraisers were forcing appraisals based on contact prices, that's no longer happening, which is certainly a good thing.
So what happens if the home you are buying or selling does not appraise? I actually just had this happen with some buyers that I am working with. The home that they are buying fell short of appraisal by $2500.00. That may not seem like a lot, but it is built in equity and you may not want to lose.
Following are scenarios that could happen if the home does not appraise:
1. Buyer can proceed with contract with no regard to appraised value. Please note: this normally only works under the following circumstances:
- If it is a cash deal.
- If the buyer is putting down a large enough lump sum of a down payment that the lender is OK with the appraisal
- If the buyer chooses to come up with the difference out of pocket.
2. Within 3 days of appraisal buyer and seller can come to an agreement to lower the contract price to the appraised amount. If this is not possible then buyer can cancel the contract and receive a full refund of their deposit.
For more info on Appraisals or Tallahassee Real Estate in general, please feel free to call or e-mail me.
