Options for when an appraisal comes in lower than the contract price.
What happens when the appraisal comes in lower than the contract price? When a seller is in this position, there are a few things that can be done. But first, I strongly recommend the seller get in writing from the buyer that they will cover an appraisal shortfall. That sets the seller up in the best position.
However, for cases where they didn’t have that in place, and the seller received a low appraisal, there are three things that can be done:
1. Agree to a new price. The seller could agree to the appraised price.
2. Tell the buyer that they won’t agree to that price. The buyer will have to come up with additional money for the closing to cover the appraisal shortfall.
3. Renegotiate. If the appraisal came in at one price and the contract price was higher, the seller can negotiate and meet somewhere in the middle with the buyer.
If you have any further questions, I’d be glad to answer them. Feel free to give me a call at any time, I’d love to help you.
