How to Deal With a Low Home Appraisal
Want to learn how to deal with a low home appraisal? In a competitive real estate market, a home being sold may enter into a multiple offer situation which could potentially raise the purchase price above the comparable sales in the area. In a situation like this, it is possible that the home appraisal for the buyer's mortgage lender will come in lower than the purchase price. In a real estate market that favors buyers (home prices are soft or declining), sellers can also face a home appraisal that is lower than what they paid for the home if they bought the house at the peak of the market. Be aware that a low home appraisal can happen in any type of real estate market.
Why Do Low Appraisals Happen?
Here are a few reasons why a home appraisals may come in low:
Inflated home price because of multiple offers.
Declining real estate market due to a large inventory of homes and not enough buyers.
The seller has overpriced the home.
The real estate appraiser lacks experience and doesn't understand the influences on value.
The real estate appraiser incorrectly selected his comparable sales for his report which may have resulted in a lower home value than what should have been assessed.