If your home appraisal comes in lower than the sales price, it's essential to understand the next steps and your options as a home buyer and home seller. At Bonilla Group, we guide you through the entire process to ensure you make informed decisions.

The first thing to know is that if you're using a home loan, the appraisal significantly impacts your financing. Lenders will only provide funds based on the appraised value of the property, not the agreed-upon sale price. This means any shortfall must be covered out of your pocket.

Appraisals typically cost between $500 and $600, and the buyer usually pays this fee. An appraisal provides an independent assessment of the home's value, which is crucial for both buyers and seller, lenders.

If the appraisal comes in short, here’s what happens next:

Negotiation: The buyer and seller must negotiate to reach a new agreement. This might involve lowering the sale price, splitting the difference, or the buyer bringing extra funds to the table.

Appraisal Contingency: If your contract includes an appraisal contingency, you may have the option to back out of the deal without penalty if the appraisal comes in low.

Reappraisal Request: Sometimes, you can request a second appraisal if you believe the initial one was flawed, though this is less common and often subject to the lender's approval.

Adjusting the Loan Amount: The buyer may choose to increase their down payment to cover the gap between the loan amount and the sale price.

Canceling the Sale: If a resolution can't be reached, the sale might be canceled. However, this means restarting the home buying process, which can be time-consuming and stressful.

Sellers should understand that an appraisal report follows the property, especially with FHA loans, where the report stays with the home for about six months. This means relisting the property at a higher price won't eliminate the low appraisal record.

At Bonilla Group, we communicate with appraisers to ensure they are aware of any upgrades or unique features of the property that may affect its value. However, we don’t have any influence over the independent appraisal process.

Understanding the appraisal process and knowing your options helps prevent surprises and ensures a smoother home buying experience. Contact Bonilla Group for expert guidance on navigating low appraisals and other real estate challenges."

Laura Bonilla

Angelica Bonilla

Bonilla Group

Excellence Real Estate HD