What happens if my appraisal doesnʼt pass?
When a home appraisal doesn’t pass, it can create a number of challenges for both the buyer and seller. The appraisal is an important step in the home buying process, as it determines the fair market value of the property. If the appraisal comes in lower than the agreed-upon purchase price, it can have significant implications for the transaction.
One of the potential outcomes of a failed appraisal is that the buyer may have difficulty securing financing for the home. Lenders typically require an appraisal to ensure that the property is worth the amount of the loan. If the appraisal comes in lower than the loan amount, the lender may be unwilling to fund the loan, leaving the buyer unable to purchase the home.
If the buyer is unable to secure financing due to a low appraisal, they may have a few options. One option is for the buyer to come up with the additional funds to cover the difference between the appraised value and the purchase price. However, this may not be feasible for all buyers, especially if they are already stretching their budget to purchase the home.
Another option for the buyer is to negotiate with the seller to lower the purchase price to match the appraised value. This may be a more appealing option for both parties, as it allows the transaction to move forward without the need for additional funds from the buyer.
In some cases, the seller may choose to contest the appraisal if they believe it is inaccurate. This can involve providing additional information or evidence to support a higher value for the property. However, this process can be time-consuming and may not always result in a higher appraisal value.
Overall, a failed appraisal can be a significant hurdle in the home buying process, but there are options available to both buyers and sellers to address the issue and move forward with the transaction.
FAQs related to What happens if my appraisal doesnʼt pass:
1. Can I appeal a low appraisal?
Yes, you can appeal a low appraisal by providing additional information or evidence to support a higher value for the property.
2. Will a low appraisal affect my ability to refinance?
Yes, a low appraisal may affect your ability to refinance your home if the appraised value is lower than the loan amount.
3. Can I get a second appraisal if the first one is low?
Yes, you may be able to request a second appraisal if you believe the first one is inaccurate or if you have additional information to support a higher value for the property.
4. What can I do if the seller refuses to lower the price after a low appraisal?
If the seller refuses to lower the price after a low appraisal, you may need to reconsider your options or negotiate further with the seller.
5. How much does a second appraisal cost?
The cost of a second appraisal can vary depending on the appraiser and the location of the property.
6. Can I still purchase the home if the appraisal doesn’t pass?
It may be possible to still purchase the home if the appraisal doesn’t pass, but you may need to negotiate with the seller or come up with additional funds to cover the difference.
7. Will a low appraisal affect my property taxes?
A low appraisal may affect your property taxes if the assessed value of the property is lower than expected.
8. Can the appraisal be waived if I’m paying cash for the home?
In some cases, the appraisal may be waived if you are paying cash for the home, but this is less common.
9. Does the appraisal value affect the home’s resale value?
Yes, the appraisal value can affect the home’s resale value, as it provides a benchmark for future transactions.
10. Can I get my earnest money back if the appraisal doesn’t pass?
Whether you can get your earnest money back if the appraisal doesn’t pass will depend on the terms of your contract and negotiations with the seller.
11. How long does it take to get a second appraisal?
The timeline for getting a second appraisal can vary depending on the appraiser’s availability and the complexity of the property.
12. Can I request a copy of the appraisal report?
Yes, you have the right to request a copy of the appraisal report to review the details and findings of the appraisal.