Appraisal Under Value, Now What?

When a real estate appraisal comes in under the agreed upon sale price we call it, a short appraisal. As in, ‘short’ of the value it needs to be. It can be a showstopper because the bank will only loan to that amount and the deal is in jeopardy. What now? There are 5 options with a short appraisal.  

1. The seller comes down to meet the appraised value
2. The buyer brings extra money to closing to make up for the shortfall
3. Buyer and Seller split the difference between the short appraisal
4. Terminate the deal due based upon the financing contingency not being met
5. Challenge the short appraisal and try to get it amended to meet the sale price

None of these options are without pain. The seller never wants to come down, the buyer never wants to come up, no one wants to let the deal die and positive results from challenging a short  appraisal are more scarce than hen’s teeth.  In the end it often comes down to how badly each side wants to get to closing. I often see the parties split the appraisal gap. In my 30 year career selling real estate in Dayton, Ohio I’ve been through a lot of these and I know how to get you through these tough parts. Reach out if you need some assistance.