After agreeing on a purchase price and getting into escrow, many of my clients have questions about the appraisal. What if it comes in high? What if it comes in low? Who pays for the appraisal? Why do I need one?
These questions are very common and I have found that taking a few minutes to explain the details can save folks a whole lot of time and worry.
Here’s the deal if your appraisal should come back low: There are usually 1 of 3 things that can happen:
1. The seller drops the purchase price down to the appraised value.
2. The buyer comes to the table with more cash to make up the difference between the loan amount and the appraised value.
3. The buyer and seller agree to meet in the middle somewhere. Meaning the buyer comes in with a bit more cash and the seller agrees to lower the purchase price a bit.
There are times when the buyer and seller can’t come to an agreement and the deal falls through but on the other hand, there are also times when the appraisal comes in OVER the purchase price. And in cases when I’m representing the buyer, that is great news to give because that means, they’ve gotten some value in the home already!
For more info regarding appraisals or other real estate questions, you can reach me at: Carmen@GreenMeansGrow.com