Ignite FB Tracking PixelA home appraisal has come back below purchase price - What's next? - Khalid & Donna Mahmud ,CA DRE #01812087,CA DRE # 01812367
eXp Realty Of California Inc.
Khalid & Donna Mahmud ,CA DRE #01812087,CA DRE # 01812367, eXp Realty Of California Inc.Phone: (408) 464-6442
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A home appraisal has come back below purchase price - What's next?

by Khalid & Donna Mahmud ,CA DRE #01812087,CA DRE # 01812367 03/29/2023

The process of purchasing a home can be tedious, as there are many legalities and service providers you’ll work with to accomplish buying a property. One of these vital steps is the appraisal process, in which mortgage lenders send over a professional appraiser to examine a property.

This is done to make sure its value is equivalent to the loan amount being requested. If you get a low appraisal offer, it’s valuable to know your options to proceed forward in the most orderly way possible. 


What happens if an appraisal comes back lower than the offer price?

Sometimes the appraised value of a home will come back lower than the requested loan amount due to a number of factors. If the home fails to meet certain guidelines, your lender may decide to offer you less funding than originally requested or may not agree to the loan at all. 

However, there are options in favor of the buyer in the case a home appraisal comes in lower than expected. 


How do you negotiate with a seller after a low appraisal?

In the case of a low appraisal, it’s essential to do research to get a better understanding of why the report came back lower than the purchase price. Research the local real estate market because in some cases, if the home has been on the market for a while, the listing price may be outdated. 

If the low appraisal was justified, you can negotiate with the seller to help pay for needed repairs or ask if they can meet you in the middle with their listing price. 


Can buyers back out if the appraisal is low?

If there is an appraisal contingency in the purchase agreement, a buyer can back out of a home purchase if the appraisal comes back too low. This is why it’s vital to examine and pay close attention to detail with the help of your real estate agent to all items in the purchase contract. 

A low home appraisal isn’t the end of your home buying process, it’s simply an obstacle that can be overcome with research and planning. 


About the Author
Author

Khalid & Donna Mahmud ,CA DRE #01812087,CA DRE # 01812367

As a licensed real estate specialists you can rely on Khalid & Donna to help you reach your personal and financial goals whether you are - buying your first home, an investor, moving up, sizing down, refinancing or purchasing an investment property. Also great resource for homeowners who have a hardship & distressed property scenario and unable to keep up with the payments. Areas covered: Entire main Bay Area & all surrounding counties with extensive client portfolio of bought & sold properties. Have an extensive diverse background in the fields of Real Estate, and Program Management. I believe in helping and educating clients make informed decision in their real estate transaction that will meet their criteria and goals. .