Real Estate Rookie 198: Rookie Reply: What To Do When an Appraisal Comes Back Low?
This week’s question comes from Mantas on the Real Estate Rookie Facebook Group. Mantas is asking: My buddy placed an offer substantially above asking price and the seller, before accepting the offer, asked my friend if he would pay the difference if the appraisal came in lower than the offer. Anyone encountered this situation and what would be the best response if any?
Ah, the classic appraisal gap/appraisal contingency. During hot housing markets (like we’ve been experiencing over the past two years), these types of offers have become more and more common. A seller wants to be sure that they can get the sales price they want and the buyer often has to pay the price to cover the appraisal difference. But what are some ways to get around this if your appraisal comes back low?
Here are some suggestions:
Do as much research beforehand so you know an appropriate appraisal value before the appraisal
Run comps using real estate data tools (like PropStream) or look up comparable home sales in your area using a listing service
Challenge the appraisal buy checking for discrepancies and running comps
Get a different appraisal ordered or switch to a more flexible lender if all else fails
And more in the episode…
If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).
Links from the Show
Real Estate Rookie Youtube Channel
Real Estate Rookie Facebook Group
Check the full show notes here: https://www.biggerpockets.com/blog/rookie-198
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