If you’re a seller, here are three ways to rectify a low appraisal.
We’re in a very strong seller’s market in the Greater Palm Springs area, and it’s not unusual for a home’s appraised price to not equal its contract price, especially if the property’s gone into escrow after a multiple-offer situation where buyers may have been making offers over asking price. When this occurs, there are three things you can do to rectify the situation as a seller:
1. Check to see if human error is involved. Everyone’s busy in our industry right now, including appraisers, and there may be a typo or some other issue that was overlooked in the appraisal. If so, you can get that clarified quickly.
2. Create a rebuttal. In doing this, your agent will pull comps from your neighborhood and submit them to the lender. The lender will then review them, and sometimes they’re able to make adjustments to move the appraised price closer to the contract price. It doesn’t always work out to the seller’s benefit, but it’s worth trying. If the rebuttal doesn’t work, you’re left with the third option…
3. Renegotiate with the buyer’s agent. Some listing agents will suggest up front—especially if you’re in a multiple-offer situation and negotiating over the asking price—that you ask the buyer to remove the appraisal contingency. They’d still have the opportunity to do an appraisal during their due diligence period, but if the appraisal doesn’t match the contract price, they wouldn’t be able to use that as justification to cancel the deal. Since 60% of all closings in Coachella Valley are cash deals, appraisers sometimes have a hard time finding the necessary comps to support a price that’s accelerated quickly. As we all know, our market has been very strong in the last year and there are no signs of slowing down in 2021.
Here at the Will Cook Group, if we’re representing you, we’ll act in your best interest and give you the necessary tools to make the best deal. If we end up with an appraisal that doesn’t match the contract price, we’ll negotiate to get you the highest possible price for your home.
If you have questions about appraisals, our market, or anything real estate-related, don’t hesitate to reach out to me. I’d love to help you.