Buying Charlotte Real Estate: What if the Appraised Value is Lower than the Purchase Price?
After just having experienced this with a seller today, I thought I’d share a Charlotte seller dilemma that we seem to face more often now than ever before. What happens if you have a signed Contract to purchase a piece of Charlotte real estate and the appraised value comes in lower than your agreed upon purchase price? Unfortunately, this is happening more often these days.
Don’t give up! It is still quite possible to salvage the deal. Here are four options to consider, if you do find yourself in this position:
#1: Ask the lender to review the appraisal.
If you are aware of comparable sales or any other pertinent data that was not considered by the appraiser, provide that information to your lender and ask for a review of the appraisal. If problems are found with the first appraisal, ask your lender to order a second appraisal by a qualified real estate appraiser.
#2: Ask the seller to drop the price to reflect the appraised value.
The seller is in a difficult situation here. If you cannot get a loan because the house appraised for less than the agreed upon purchase price, you can walk away from the deal, as long as you have a financing contingency in the Contract. On the other hand, if the seller will not take less money now, most likely, this whole scenario will play out again the next time around. Savvy sellers may recognize this and if they still need to sell, they may be willing to drop their price to the appraised value.
#3: Pay the difference between the appraised value and the purchase price.
If you’re willing to pay the difference between the appraised value and the purchase price, and your lender will not protest. Lenders are sometimes more than willing to put deals through, as long as their interests are protected. Only pay the difference if you are absolutely positive the Charlotte real estate is worth the asking price, and you’ve exhausted all other options.
#4: Walk away from the deal.
You like the Charlotte real estate or you would not have made an Offer; however, there are times when the best option is to walk away. Now is not the time to let your emotions get in the way of sound financial judgment. If your comparables and local data match the lower appraisal figure and the sellers won’t ‘budge,’ walking away may be your best financial move.
If you’re ready to buy, I can guide you through the process of finding a home, negotiating a contract and getting an appraisal that’ll match or beat the selling price–and if we don’t, we know how to combat the ‘bad appraisal’ syndrome!