What To Do When You Get a Low Appraisal On Your Magnolia TX Real Estate
Talk about a setback! You’ve spent recent months preparing your house for sale or looking for the perfect house to buy, negotiating a fair price, and anxiously awaiting the settlement date. And now the appraisal on that piece of Magnolia TX real estate has come in below the asking price. What to do? First, whether you are the buyer or the seller, remain calm. This is not an unusual occurrence in today’s market. Understanding the possible reasons for the disappointing appraisal and exploring strategies to save the transaction are your next steps.
- Overpricing by seller
- Declining market values
- An abundance of foreclosures or short sales in the neighborhood
- Inflated price resulting from multiple offers
- Incorrect evaluation by the appraiser
- Cash back to buyer from the seller
- Error(s) on the part of the appraiser
WHAT A SELLER CAN DO:
Lower the price of the Magnolia TX real estate. After researching and analyzing the latest comps with your Realtor, realistically reconsider your asking price and decide whether you are willing to begin the selling process all over again.
- Offer to carry a second mortgage for the buyer if the above option is not possible.
WHAT A BUYER CAN DO:
- Ask the seller to make up the difference in cash.
- Ask the lender for a new appraisal after presenting your justification for this request.
OPTIONS AVAILABLE TO BOTH SELLER AND BUYER:
- Check the appraiser’s report for errors (in facts or omission) in information about the Magnolia TX real estate. Verify the accuracy of the square footage, the number of bedrooms and bathrooms. Have any recent improvements you’ve made to the property been included? If not, appeal the appraisal.
- Supply to the underwriter a list of recent comparable sales that justify the selling/purchase price and ask for a review of the appraisal.
- Order a new appraisal. Although you will have to pay for it, it could be money well spent if it results in a higher appraisal. Your lender will give you a list of appraisers if the loan is an FHA one. If it’s conventional, it is subject to the rules of the Home Valuation Code of Conduct (HVCC).
- As a last resort, cancel the transaction. Most purchase contracts contain a loan contingency which deals with low appraisals.
Whether you are new to the Magnolia Texas real estate market, thinking of moving up, or you’re an experienced investor, Pam Sitterly has the expertise, proven track record, and resources to help you buy Magnolia TX real estate for sale or market Magnolia TX homes for sale. Enthusiasm, knowledge of the area and personal concern for her client’s interests combine to make Pam an outstanding resource for your real estate transactions.
Pam works extensively to help Buyers and Sellers meet their Magnolia Texas real estate goals. For more information about buying or selling your Magnolia TX home, please call Pam at 281-723-0324 or via email with this convenient contact form.