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5 Ways to Deal with a Low Appraisal

Meeting about houses

1. Lower the price of the house to the appraised value

You can always sell the home without negotiating with anyone. This is the quickest way to get through a low appraisal, but you could be leaving money on the table.

2. The buyer could make up the difference

Sometimes the buyer will have enough cash on hand to make up the difference between the appraised value and the selling price. If the buyer is confident that the value is there, they can add cash to the down payment and the lender can make it work.

3. Meet in the middle

If both parties want the sale to go through, you could agree to split the difference of the appraised value and the contract price.

4. Challenge the appraisal

This can be difficult, but can be done. Only the appraiser’s client “the lender” can demand a review of the appraisal, and only the buyer is able to request the review or order a second appraisal.

5. Putting the house back on the market

If the buyer won’t put more money down or is not willing to split the difference in price, you can take your chances by putting the home back on the market. If the appraisal was an FHA appraisal it will stick to the property for 120 days, after that it expires. In this case you would hope for a new offer to be either cash or a conventional loan.


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