About

If the appraisal of the home you’re trying to purchase comes in low, you have four options in which to proceed.How much would your Wilmington home sell for in today's market?    Want to buy a Wilmington Home? Search all homes for sale.Here in Wilmington, most price ranges in most locations are in a seller’s market. With high demand and low supply, we’re starting to see a lot of multiple offer situations. Sellers are pricing properties aggressively, and buyers have to make high offers to get the home they want. Sometimes appraisers can’t keep up with market conditions like these, leading to issues with low appraisals.What do you do if the appraisal comes in low for a home you’re trying to purchase? You have a few different options.  As a buyer, there are four ways you can handle a low appraisal. The first is to ask the seller to lower the price of the home to the appraised value. Some sellers are willing to do this because they know the buyer won’t pay more than the appraised value. Your second option is to make up the difference between the appraised value and the purchase price. Your lender will only lend a certain percentage based on your loan amount for the actual appraised value or the contract price—whichever is lower. If the contract price of the home is $200,000 and it appraises at $190,000 and you’re doing an 80/20 loan, the lender will only lend 80% of $190,000. Therefore, you’ll have to make up the difference between the 80% of $190,000 and the $200,000 purchase price. The third option is to meet the seller somewhere in the middle, with you going up in price a little bit and them going down in price a little bit. If the low appraisal comes back during the due diligence period—which we highly recommend—your fourth option is to terminate the contract and find another house to buy. Before you make an offer on a property, make sure you’re making a reasonable offer that’s above what others are offering but isn’t also overpaying for the property. If you have any questions about appraisals or are looking to buy or sell a home, feel free to give me a call or send me an email. I’d be happy to help you.