What if the appraisal is less than the purchase price?

When buying a home, one important step in the process is the home appraisal. This is where a professional appraiser evaluates the property to determine its fair market value. However, what happens if the appraisal comes back lower than the purchase price you agreed upon with the seller?

What if the appraisal is less than the purchase price?

If the appraisal is less than the purchase price, it could potentially have some implications for the transaction. Here are some things to consider in this situation:

1.

Can you still buy the house if the appraisal is lower?

Yes, you can still buy the house even if the appraisal is lower than the purchase price. However, it may impact how much you are able to finance through a mortgage.

2.

Will the lender still approve the loan if the appraisal is low?

In some cases, the lender may still approve the loan even if the appraisal is low. However, they may require you to make up the difference in cash or negotiate with the seller for a lower purchase price.

3.

Can you renegotiate the purchase price if the appraisal is low?

Yes, you can try to renegotiate the purchase price with the seller if the appraisal comes back lower than expected.

4.

Can you challenge the appraisal if you believe it is incorrect?

You can request a reconsideration of value from the lender with additional evidence to support your claim if you believe the appraisal is incorrect.

5.

What if the seller refuses to lower the price?

If the seller refuses to lower the price and you are unable or unwilling to make up the difference in cash, you may need to walk away from the deal.

6.

Can you order a second appraisal if the first one is low?

You can request a second appraisal, but the lender ultimately decides whether they will accept it or not.

7.

Should you get a pre-appraisal before making an offer?

Getting a pre-appraisal before making an offer can help you gauge whether the property is priced accurately before committing to a purchase.

8.

Is it common for appraisals to come in lower than the purchase price?

It is not uncommon for appraisals to come in lower than the purchase price, especially in a competitive real estate market.

9.

Can you waive the appraisal contingency in your offer?

Waiving the appraisal contingency in your offer means you are willing to proceed with the purchase regardless of the appraisal value. This can be risky if the appraisal comes in low.

10.

Can the appraisal be affected by the condition of the property?

Yes, the condition of the property can impact the appraisal value. If there are major issues that affect the property’s value, the appraisal may come in lower.

11.

Does the appraisal value affect property taxes?

The appraisal value can impact property taxes, as it is used by local government authorities to determine the property’s assessed value for tax purposes.

12.

Can you contest the appraisal with the appraisal management company?

If you believe the appraisal is inaccurate, you can submit a formal complaint to the appraisal management company for review.

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