Tuesday, December 3, 2019 / by Andy Mandel
Whether you’re buying or selling a property, an appraisal is going to be part of the process. It’s ordered by the bank who is giving the mortgage to a buyer. They will hire a completely independent third-party to come out to the property and take note of the upgrades in the home, the condition, and the location.
Then the appraiser will look at what has sold in the last six months in a similar area with similar square footage. That’s when they’ll give their appraisal of what they think the property is worth.
If you buy a home for $400,000 and the appraisal comes in at $375,000, what do you do? Here in Florida, the deal is contingent on the appraisal matching the sale price. If the appraisal comes in low, this means you have to renegotiate. You don’t want to pay above an appraised value as a buyer, but if it’s the perfect home and you have to have it, you can agree to pay above the appraised value. You don't have to pay the full $400,000, but you could make a counteroffer at $380,000.
If you’re on the wrong end of this kind of situation, it is possible to challenge the appraisal. This is usually a lot easier than having to renegotiate. We deal with this kind of situation all the time and have helped buyers challenge their appraisals successfully.
If you are thinking of buying or selling a home, there are a lot of things you’ll want to know. If you have any questions for me about the process, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.