What If The Appraisal Comes In Under The Offer Price?

When buying a house, it is always possible that the appraisal will not measure up to your offer. The cause may be the condition of the home or the location.

Questions will then need to be asked including: Are you offering too much for the property, why didn't it value up and are reasons serious, will your financing fall through, will you need to find more money, will the seller drop the price?

Firstly regarding your borrowings. The mortgage lender (presumably a Bank) will generally take a conservative approach and value the property on the low side of your expected range. So, you need to discuss the appraisal, with regards financing, with your mortgage lender.

Regarding the price you are offering. A lot depends on what clauses you put in the contract and whether or not you get out of the contract. Purchase contracts can usually be amended and changed. That is why is always best to seek professional legal advice when signing any legal contract.

A low appraisal can be an excellent negotiating tool if if the appraisal comes in too low. A low appraisal could be the perfect opportunity for negotiating a lower price for the property. You should also seriously question why you are buying the property and whether you should complete the deal if the price is out of line with the appraisal.

Negotiating is what your agent is being paid for. Make the agent earn their commission.

Just because the appraisal comes in lower is not a bad thing. It gives you, the buyer, negotiating power for a better deal.