Hello friends Today, we're discussing a crucial topic for all you property buyers out there – what to do when the appraisal comes in lower than expected. It's not uncommon, and we've got your back with some valuable insights.
So, picture this: You've found your dream property, signed on the dotted line, and everything seems perfect. But when you head to the bank, they send in a third-party appraiser to make sure the property's value matches the purchase price you've agreed upon. And, well, sometimes, that appraisal report comes back with a lower value than you expected.
Review the Report:
Take a close look at the appraisal report. Be objective and thorough. And don't hesitate to get your real estate broker involved. They can help you identify any discrepancies or incorrect assumptions made by the appraiser. Sometimes, a fresh pair of eyes can spot what's been missed.
Seek a Second Opinion:
If you're not satisfied with the initial appraisal, consider getting a second opinion from a different appraisal company. Having an entirely new set of eyes on the property can bring a different perspective and potentially lead to a different valuation.
Provide Supporting Data:
Your real estate broker can play a pivotal role in substantiating the agreed-upon purchase price. They can gather relevant data on comparable sales in the area and present it to the financial institution. Remember, even appraisers can make mistakes, and this additional data can help them reconsider their valuation.
Renegotiate the Purchase Price:
If all else fails and you're still facing a low appraisal value, it might be time to sit down with the sellers. They, too, have an interest in a smooth transaction. Discuss the possibility of amending the purchase price to align with the appraisal value. It's often in both parties' best interests to find a reasonable compromise.
Explore Alternative Lenders:
If you're hitting roadblocks with your current lender, consider looking into alternative lending options. While this might mean slightly higher interest rates, it could be a way to bridge the gap between your agreed-upon purchase price and the appraised value.
Work with an Experienced Agent: 
Prevention is always the best medicine, right? When you work with a knowledgeable realtor by your side, such situations will be avoided and even if they come, they will be able to provide the backup data and comparables to satisfy the appraiser. This is because your broker would have done deep and thorough due diligence on fair market value when you were trying to purchase the property. The better this analysis is, the thinner are the chances of such a situation where the appraisal value becomes low.
Remember, it's all part of the real estate journey, and with the right strategies, you can still achieve your property dreams.
Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate and we will do our best to help.
Mudit Mehta
Broker of Record
ELIXIR REAL ESTATE INC.
Off: 416-816-6001 | [email protected]
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