Now that the real estate market has more buyers than sellers, some properties are escalating in price with multiple bids. Appraisers are scrambling to bring values in, at (or above) the sales price so the buyer can qualify for a loan. The appraiser generally must provide 3 comparable properties in the general area of the property under contract that support the contract price of the property being appraised.
When an appraised value comes in low on a property under contract, there are a few options open to the buyer and sellers:
1. the seller can lower the sales price to the appraised value.
2. The buyer can make up the difference between the appraised value and the contract price by bringing more money to closing
3. the seller and buyer can negotiate a new price somewhere in between the contract price and the appraised value
4. the buyer can void the contract
According to statistics with the National Association of Realtors, 15% of contracts are negotiated to a lower price due to low appraisals and 11 % of contracts are cancelled due to low appraisals.
The realtor's role in the process is to keep the buyers and sellers informed at the listing stage of the property, the contract negotiating stage and the contingency period of the contract.
If you'd like to buy or sell a property call me today, I will treat your transaction as if it were my own....