Appraisal came in less than what we agreed to pay....advice needed

BrittR22 · September 2011

The appraisal came in $3,500 than our agreed price. Our realtor is saying we can negociate with the sellers or pay it all ourselves.

Have you been in this situation? Where do we go from here? I am sorry- I am so new to all this!

jacksjerseygirl · September 2011

It comes down to how much you want this house and how much the sellers want to sell it.

You can try to get the sellers to front the whole cost/reduce the cost of home, you can try to split it, you can pay the whole thing, or you can walk away.

I would start first with requesting the sellers pay it all/reduce price (it isn't in your interest to buy a home for more than it is valued). Depending on how much they owe the bank and how fluid they are and how much they want this to be done - they might just pay it for you/reduce house cost. Or, they might come back with a half-half deal or NO deal.

At that point you really have to decide if this home and all you have invested in it to this point is worth it to you to come to the table with extra funds.

honey&badger · September 2011

jacksjerseygirl:
It comes down to how much you want this house and how much the sellers want to sell it.

You can try to get the sellers to front the whole cost/reduce the cost of home, you can try to split it, you can pay the whole thing, or you can walk away.
I would start first with requesting the sellers pay it all/reduce price (it isn't in your interest to buy a home for more than it is valued). Depending on how much they owe the bank and how fluid they are and how much they want this to be done - they might just pay it for you/reduce house cost. Or, they might come back with a half-half deal or NO deal.
At that point you really have to decide if this home and all you have invested in it to this point is worth it to you to come to the table with extra funds.

I think this is spot-on.

It is not unheard of, especially in this economy, for a seller to reduce the price based on a low appraisal...especially if it's only a $3500 reduction.

sjb&apa · September 2011

Yep ... I would start by asking the seller to reduce the price by $3500.

In this market, many sellers will agree to this. If they don't, and you walk away from the deal because you don't want to chip in an extra $3500, they're likely going to have the same issue with any other buyers. They're probably going to get a very similar appraisal in any future transactions, so they're better off reducing their price than risking you walking away. If you walk away from the sale, they have to wait around for another buyer to come along, and then probably get the same appraisal amount next time too.

12bailey18 · September 2011

I would ask the sellers to reduce the price. If they say no I would walk away.

trawas01 · September 2011

12bailey18:
I would ask the sellers to reduce the price. If they say no I would walk away.

Agreed. In this market its silly to pay more for a house then the appraisal is.

EastCoastBride · September 2011

You can also get PMI for it. Which is what we did. Our appraisal was wrong. Flat out wrong. They considered the bottom level of our house as "below grade" when it wasn't. I can't even get into the whole thing because it's angering. But we weren't willing to walk away over it. Perhaps not the smartest move, but we love the house and I can't say enough about the neighborhood and how perfect it's been for us. I dont' regret our decision. we're also in it for the long haul (until DS goes to college, at least).

breaness · September 2011

$3,500 isn't a lot. They'll likely drop the price.

Our house under appraised by almost a full $20k. We got the appraisal reconsidered and it was bumped up, but only by $2k. The sellers came down $11k and we had to make up the difference. We weren't letting that house go so it was fine with us. If the house were at the high end of what we were willing to spend and we ran into this situation we wouldn't have done it, but since we were happy to pay the full price it wasn't a big deal.

breaness · September 2011

trawas01:
Agreed. In this market its silly to pay more for a house then the appraisal is.

That depends on what it's worth to you.

Our house underappraised by quite a bit, but it was larger than any others we looked at, on a lot more land, a great price and in beautiful condition. It's a little farther away than the houses where we were looking previously, but there was no comparison between the house we bought and the dozens that we looked at. We weren't going to let it go because it under-appraised. We would have been hard-pressed to find anything in that price range, that nice again.

Sisugal · September 2011

I would ask the sellers to lower the price to the appraisal price. They are not going to be able to sell it for more than that.

Other options" split the difference 1/2 and 1/2 or pay the difference in full yourself

koosh ball · September 2011

Ours came in under 2,500 less than we agreed to pay. The seller lowered the price by 2,500.

ecleptic · September 2011

We had a house appraise 8k under agreed price. The sellers refused to lower the price or even meet us part of the way so we had to walk. We had just enough cash after the sale to do the renovations necessary for us to feel comfortable buying the house- an extra 8k in cash would have wiped out our emergency funds and half of our renovation budget.

We went on to buy a different house- same area, already upgraded, 20k cheaper, and it appraised appropriately. A house that hadn't been on the market before the other house's deal fell through.... so it worked out for the best

Appraisal came in less than what we agreed to pay....advice needed

Re: Appraisal came in less than what we agreed to pay....advice needed

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