House Didn’t Appraise, Now What?

There are several reasons why a home may not appraise for the expected value.  But what do you do when this happens?  Walk away?  Not necessarily.  You do have some options to consider if this happens to you.

To start, you, the buyer, can come in with the extra money to make up the difference.  Similarly, the seller can agree to come down in the price to meet the value of the appraisal.  Or, if both sides are equally motivated, you could each budge a little in the other’s direction and meet in the middle.  These are best case scenarios…

There is also the option to challenge the appraisal.  A lot of people don’t know that this option exists. Yes, you can challenge an appraisal if you believe there are errors, omissions or inaccuracies in the valuation. Challenging an appraisal typically involves a formal process and should be based on legitimate reasons, such as factual errors or inconsistencies.  It’s essential to remember that appraisals are professional opinions, and most challenges will not result in a change to the appraised value. The burden of proof is on the party challenging the appraisal, so having solid, fact-based evidence to support your case is crucial. You should ask your lender for some insight in this process.

Lastly, you could opt to get a second opinion.  Getting a second appraisal typically involves working with your lender, as they will need to coordinate and approve the process. Keep in mind that not all lenders will automatically approve a second appraisal, and the process may vary from one lender to another. Additionally, be aware that the second appraisal may not always result in a higher value, and you should be prepared for the possibility that the second appraisal may confirm the initial valuation or even come in lower.

Never a great situation, but it workable with the right people in your corner.