An appraisal is usually a routine part of the home-buying process, giving the lender confidence that the property is worth the asking price. If the seller used a reputable real estate agent to set a price, the appraisal will generally be in the ballpark of what you offered. But what if the appraisal comes back with a property value much lower than the price you agreed on? Fortunately, in this situation, you have some options that might still allow your sale to go through.

What Causes a Low Appraisal?

Sometimes sellers simply overestimate their property value or use very different properties for comparison. In other cases, the home inspection might reveal substantial structural problems, which can dramatically reduce the value of the house. Neighborhoods with lots of foreclosures and short sales can also drag down property values, even if the house itself is in good condition. Lastly, the appraiser may not have been able to find any comparable sales or comps, which can throw off the accuracy of their appraisal as well.

What Can You Do If the Appraisal Is Low? 

If the appraiser decided that the sellers simply inflated their property values, you might be able to renegotiate the deal based on this new information. If you’re unable to come to an arrangement, however, you may have no choice but to walk away from the deal, since your lender is unlikely to approve a mortgage that exceeds the value of the house. If the appraiser was unable to find comparable properties in the area or relied on outdated information, you may be able to perform your own research to verify the value. For instance, your real estate agent can help you find comps, or you may want to order a second appraisal if you have serious doubts about the accuracy of the initial report. With a professional’s help, you can keep a low appraisal from dooming your sale.

If you’re shopping for your North Texas home, Lauri Bauman - Big Journey Homes at Keller Williams Realty offers the personalized service and industry-leading expertise you need. This Realtor® has an in-depth knowledge of neighborhoods and property values throughout Denton, Lake Dallas, Frisco, Flower Mound, Argyle, McKinney, and Corinth, along with a reputation for providing outstanding service to every client. Visit her website now to start browsing homes for sale, and follow her Facebook for updates and new listings. To make an appointment, call (940) 321-5111 or send a text to (214) 566-1088.