An odd mortgage qualification problem resulting in the real estate market in the US are low appraisals. Here are your options if you get a low appraisal amount.
The effort of a qualified person putting a value on a property is called an appraisal. A review of the property and other properties in the is involved in this process. Since mortgage lenders require appraisals, dealing with appraisal problems is what you need to do you’re going to get the home.
Let’s say you’re ready to put down a down payment that’s solid, have a perfect credit, and make a ton of money. You are happy, the lender is happy and the only thing left to do is get the appraisal. But the price of the appraisal comes below what you’ve agreed to pay for the home. What do you do now?
Take a deep breath first. The process of buying a home is an emotional one. Taking a step back from the process is what you need to do in order to analyze objectively whether the amount you’re paying for the property is too much. If you still want to proceed, take the appraisal to the seller and see if you can get the price lowered. Even if a solution a possible, you need to prepare yourself to walk away if it isn’t.
Then again, it’s possible that the fair market values of properties are dropping in the neighborhood. As a market cools off, you may see this in your particular neighborhood. Then you should be thankful to the appraiser if that’s the case because you’ve been kept out of a bad deal.
There’s also the chance that the appraiser may be wrong. Not that you can blame them since they’re only human and are bound to make mistakes. They may not know the neighborhood well. There are a variety of reasons you can get an appraisal that is “off.” If you suspect this is the case, check to make sure the appraiser is comparing the property to comparable homes in the neighborhood. If all else fails, have your own appraisal done for comparison purposes.
Viewed as a potential red flag is low appraisal. To be certain you’re not getting a bad deal, you need to take a closer look.