Short Appraisal? What Should a Buyer Do?
Tampa, Florida is a prime relocation area where properties are selling very quickly for top dollar, and often more than the list price. Sometimes quite a bit more.
A short appraisal means that the property did not appraise for the purchase price of the contract. The appraised value came in “short”; less than what the buyer offered the seller.
The market is moving so fast that the comparable properties are not keeping up. Sometimes values change in just a couple of months,because the prices have gone up so much that the appraisal is months behind.
If the buyer is paying cash, that is not a problem, however if financing, the lender will only lend money on the purchase price or the appraised value…WHICHEVER IS LESS.
A short appraisal is never fun, but something that we deal with often in this sellers market. So what are the buyer's options?
Ask the seller to reduce the purchase price to the appraised value.
Change the loan amount to accommodate the new loan amount.
Pay the difference out of the buyer's pocket.
Negotiate a lower price for both parties..
Buyer may withdraw from purchase since they cannot qualify for the terms of the purchase contract.
I have found that the seller will usually negotiate some…while they don’t want to pay the full shortage,they also don’t want to lose the buyer, so they will usually agree to some relief for the buyer. Besides, another buyer with a different appraiser may bring in a lower appraisal…
Helping home buyers is our business…our only business. We represent only home buyers…no confusion.
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