Appraisers use past sales in your home’s area as comparable properties to determine their valuation of your home. So what should you do if your home’s appraisal comes in lower than your contract price? There are a few options:
1. Look at the comparable properties that were used to see if there were any errors made.
2. Submit a rebuttal. Talk to your lender about a rebuttal; it could be that there are some comparables that were missed that could influence the appraisal. However, the rebuttal process can be challenging and often doesn’t pan out.
3. See if the buyer is willing to cover the difference between the appraised value and the contract price. Essentially, that would be a larger down payment toward their loan. Verify with your lender that you’re in the position to go this route.
4. Renegotiate. If nothing else, you could try to negotiate a price in the sweet spot between the appraised value and contract price, one that both parties are amenable to.
Remember that in Florida, if the appraisal of the property obtained by the buyer’s lender is insufficient to meet the terms of the loan approval, then the buyer shall be refunded their deposit and they can cancel the contract.
If you have any questions about our current market or real estate in general, don’t hesitate to reach out to us. We’d love to help you.