How To Deal With a Low Appraisal When Buying a Home

One of the most upsetting things that can happen in the home loan process is finding out that the home you are about to buy is valued at less than you thought it would be.

A low appraisal can sometimes bring a home purchase to a screeching halt.  However, there are ways to work with the situation, so that you can still close your loan.

One option is to seek a reduction in the purchase price. If the seller agrees to reduce his or her price to the appraisal amount, your problem is solved, because there is no added risk for your lender.

If the seller refuses to lower the price, another option is for you to increase the amount of your down payment.  This is not always feasible, and it will depend highly on your personal circumstances.
Third, both you, as a buyer, and the seller may agree to meet in the middle. That is, the seller agrees to reduce the price somewhat, but not as low as the appraised value. This still means it is likely that you will have to increase your down payment, but not as much as if the seller didn’t budge on price.

If neither party will compromise, the last option is for you, as a buyer, to dispute the appraisal. Ask your realtor to step in and contact the appraiser to ask what comparables were used to judge the property you seek to purchase.  Sometimes, a local realtor will know of properties that are better to use as comparables, because they have seen them inside and out. If your appraiser agrees, you may get the number you were looking for.

Our team at PrimeLending is here to guide you through every step of the loan process, from your initial pre-qualification, right through closing. We’re here for you 24/7, so please give us a call at 858-764-7825!