WHAT HAPPENS AFTER AN APPRAISAL COMES IN LOW?

<p>What happens after an appraisal comes in low? If the house appraisal comes back lower than the purchase price, the buyer has a few options to keep the deal alive. &nbsp;Make up the difference in cash The buyer can increase their down payment to make up the difference. For example, if the buyer needed the appraisal to come in at $1,000,000.00 but it comes in at $900,000 the buyer can pay the $100,000 difference in cash. What the lender is concerned about is the ratio of the loan to the appraised value of the home, not necessarily the purchase price. &nbsp;Shift some down payment to make up the difference Let’s say the buyer was planning on putting $60,000 down on a $300,000 home (a 20 percent down payment). If the appraisal comes in $10,000 low, the buyer could shift $10,000 of the money they’ve set aside for their down payment to make up the difference. &nbsp;The downside is that they’ll be putting less than 20 percent down and will have to pay private mortgage insurance (PMI) every month until their equity in the home’s loan-to-value ratio is 20 percent. Of course, this arrangement is subject to the buyer’s lender approving the smaller down payment and greater loan amount. &nbsp;Appeal the appraisal As the person who paid for the appraisal, the buyer can ask their lender to challenge the appraisal if they believe the appraiser used incorrect information or bad comps, or if they weren’t familiar enough with the area. &nbsp;Cancel the contract Not an ideal situation for you or the buyer, but if the buyer signed an appraisal contingency, they can cancel the contract and walk away from the deal."My Name is Dave! I Sell Real Estate! This Industry Changed my life" &nbsp;&nbsp;DNA Realty Group is a full service Real Estate team that provides the highest level of quality service to their clients. When you hire DNA Realty Group to work for you, you don’t just get ONE agent, instead you get an innovative and experienced Real Estate team that will work around the clock to meet all of your Real Estate needs. With so many