What Happens? Appraisal Comes In Lower Than Offer

Real Estate

Yes, the real estate market is good. Lately more so for sellers. Average sales price for Columbus Ohio has gone from $160,000 in 2011 to $220,000 today. Sellers in the last two years have been experiencing multiple offer situations, driving the value of their home up. Buyers get frustrated and overpay for a home. Thankfully the bank sends out an appraiser and often times the  purchase price comes back down to earth. Example- I go into contract for $200,000 for a single family home. I got the bid! I had to pay $15,000 over the asking price to get it but I won! Twenty one days later my bank sends out an appraiser to come up with value for the house. The appraiser comes up with a value of $192,000. Eight thousand below agreed upon purchase price. Which means the bank will only loan for the $192,000, not the $200,000. I do not have an extra eight thousand for the seller. This is where a good real estate agent can help. First option is to negotiate with the seller to drop the purchase price to the appraised value. Many seller’s are willing to do this because 30 days into the transaction the seller does not want to put back on the market again, especially when a new appraiser may come in and say the value is still $192,000. So it usually is a good idea for the seller to drop the price. Second option is to break contract. Most purchase contracts have the apppraisal clause , stating that if home does not appraise buyer may terminate the contract. Third option is to pay the difference. A good real estate agent can explain all the options to you regarding these types of situations. For most of us, buying a home is the biggest purchase we will make in our lives. Have someone qualified on you side.  Call or Text Brian Smith at 614-638-9169.