You found the perfect home. You made an offer, and it was accepted. Everything is going smoothly until you get back the appraisal and it was much lower than expected.
As a buyer, what can you do in this situation?
A recent article from realtor.com outlined the different ways buyers can move forward if they find themselves dealing with a low appraisal, including:
- Get a second opinion. If you think the first appraisal was inaccurate — and incorrectly low — you can opt to order a second appraisal. Just keep in mind that you’ll be on the hook for the fee, and there’s no guarantee that there will be a different result.
- Negotiate with the sellers. If the home you’re planning to buy was appraised for less than what you agreed to pay for it, another option is to negotiate with the sellers. A low appraisal might indicate that their house might not appraise for enough even if they put their house back on the market and receive an offer from another buyer. The seller may be willing to work with you on the price, rather than risk having the same thing occur a second time.
- Walk away. If you’re buying a home with a mortgage, the lender will only loan you as much as the home’s appraised value. So, if the home appraises low — and the sellers won’t budge on the price — you might have no option other than to walk away from the purchase.