While this may come as a surprise, with a strong growing market again, we do have some issues that can arise where a home does not appraise for the amount agreed upon in the contract. When this happens, what do you do? Well, there are a few options of what can be done when the home doesn’t appraise for the full amount agreed upon.
In this situation, the first thing that can happen is that both the buyers and sellers agree to lower the contract price down to match the amount of the appraisal. If this happens, both parties would need to sign off on the changes and the transaction continues moving forward at the lower price.
If the sellers do not wish to sell their home for the lower price, then the buyers have two options. The first is to walk away from the deal and all moneys become refunded as long as the contract was contingent upon financing and an appraisal. The second option for the buyers is to continue forward with the purchase at the higher price, but they would need to bring whatever the difference is to the table as additional money since the bank will not lend more than what the home appraises for.
The buyers would need to acknowledge that they are purchasing a property for more than it’s appraised value and that they are willing to spend more money for the home than what it is actually worth. While this doesn’t happen often, it does however happen from time to time when the purchaser finds a home that is exactly what they want, then they will sometimes pay more knowing the value isn’t always there. Once again, an addendum would need to be done to reflect all these changes and signed off by everyone prior to closing.
If you are thinking of selling your home and would like more information on how my marketing program can help expose your home to over 37,000 people in the first 24 hours of being listed, contact me today!