Today I would like to talk to you about what to do if an appraisal gets cut or comes back lower than expected.
In today’s market, there are more buyers looking for homes than there are properties available. Because of this, there are a lot of competing bids for homes, with many of them reaching above asking price. Unfortunately in this situation, sometimes the appraisal for the home comes back and doesn’t meet its valuation.
One of the things you can do in this scenario is contest the appraisal. You can have a conversation with the lender and talk to the appraiser, but you have to get data to support why you are contesting the appraisal. For this, you can utilize additional comparable properties that the appraiser may have missed. You can also use non-MLS comps and sales, especially if there is an absence of supporting data.
Some appraisers will balk at that data and call those non-arm’s-length transactions if there is no public exposure for them. However, if they are properly verified with a buyer and a seller, an agent can be the best piece of data in an appraisal. What I mean by this is that if you can get verification from those non-MLS comps that it was a non-arm’s-length transaction, you could possibly use that to assist you in getting a higher evaluation.
The other thing that you could do is talk to your appraiser about pending sales. Since our market is fluid and moving quickly, a lot of times there could be other properties that have entered the market and gone under contract but haven’t closed yet. If you can verify with the listing agent what the sale prices of those other properties are, they could be used as supporting documentation for getting a higher evaluation.
If you have any additional questions or are interested in buying or selling, please feel free to contact me. I look forward to speaking with you soon.