In a hot market, properties are often victims of overbidding by anxious and desperate buyers. Buyers have become worn down by getting beat out umpteen times by other anxious buyers financially stronger and more willing to snag a home.
Myself and many of our REALTOR colleagues know what it’s like to run into a bum appraisal. We’ve had appraisals come in so bad that we wonder what the appraiser was smoking or if they ever even saw the properties. There are several things a seller, buyer or their agents can do to handle the possibility of a property not appraising at contract price:
1) Know the market! Don’t overprice a property or set unrealistic expectations. (We’ve gone as far as declining to take listings when sellers want too much.)
2) Have a list of comparable sales readily available to offer the appraiser when they show up or be willing to answer questions when the appraiser calls.
3) Make sure you/your agent hand-feed the appraiser comps if you must!
4) Fellow agents, thank the appraiser profusely if they take the time to reach out to ask you if you had multiple offers above list price.
5) If you’re a buyer in a hot market, be willing to bring additional funds into escrow to make up the difference if an appraisal comes in low.
6) If you’re a seller, be willing to meet a buyer somewhere in the middle to make up for a low appraisal.
Some sellers don’t have to sell and some buyers don’t have to buy, so if a deal falls through, be flexible the next time around. Often buyers and sellers end up with the same result except that weeks or months have passed.
The Almighty Dollar and the Almighty Clock will eventually offer a swift kick in the pants when The Universe says it’s needed!