If you receive a low appraisal for your house in Pasadena – Selling your home in Pasadena may feel like you have a lot of power from start to finish, but there are still obstacles to overcome in order to complete the deal successfully. Let’s look at one of the largest roadblocks on your way by looking at three things you may do if your Pasadena house gets a low assessment.
Why Does the Appraisal Matter?
First and foremost, we need to have an understanding of what the appraisal actually is and why it affects anything at all.
An appraisal is a thorough examination of your home’s features and condition in order to estimate its fair market value. The appraiser is taught to take these aspects into account and then compare them to current market trends to arrive at an estimated market value. The appraisal is supposed to be a fairly thorough examination of your entire property.
If your buyer has made an outrageous offer and you receive a substantially lower appraisal, you’re in a bad spot. The reason for this is that the buyer will almost surely need a house loan from a mortgage lender, and the lender will be hesitant to approve the loan for such an outrageously high price if an appraiser says the property isn’t worth that much.
If the buyer defaults on their mortgage payments, the buyer’s lender may be stuck with a lower-value home on which they can’t recuperate their costs. In this scenario, the buyer’s loan was denied, they were unable to obtain financing, and your home was unable to be sold.
Go Through the Appraisal Report
Now that we have a decent grasp of both what an appraisal is, and the purpose it serves, what do we do if the appraisal comes in low?
Whatever the outcome of your appraisal, you should take the time to sit down and read the entire report from beginning to end. Check every information to ensure there were no errors and that your home was appropriately represented and analysed.
You won’t have much of a case if you believe something should be priced more or lower than the report suggests, but you will have a strong case if the report contains obvious inaccuracies.
Request a Do-Over
If the first appraisal comes back low, you do have the option of requesting a second appraisal be performed by a different appraiser.
If the first appraiser’s skill, expertise, or qualifications are questioned, this is normally the next step. This is your second chance to go all out and prepare every square inch of your home to the best of your ability.
Deep clean everything, make any quick repairs you might have neglected previously, and hopefully the numbers come back a bit more in your favor.
Let’s say both of your assessment reports are right, but there’s still a significant value gap. What should you do next? The buyer has the option of paying the difference between the appraisal and their offer out of pocket, but this isn’t a common solution because their lender would only authorise a loan up to a particular amount that doesn’t cover the total sale price.
Instead, the failsafe can be a bit awkward but it is the quickest way to turn things around: renegotiate.
Hopefully, this will never happen because you will have another buyer lined up, but if it does, you can always reduce the price to a level that the buyer can afford.
Help When You Get a Low Appraisal When Selling in Pasadena
Getting a low appraisal can be frustrating, but you can get help by contacting our team of skilled professionals at (713) 766-0442!