By Living Room Realty, January 11, 2021
Sometimes a low appraisal isn’t always the downfall of a deal. When the appraisal comes in low, as the contract is written, it triggers the buyers financing contingency (this can be waived by the buyers in their offer if they choose to). When Michael and Rebecca got the news this happened to them, they were discouraged as they were already at the top of their price point. In their case, the financing contingency was triggered and we had 3 business days to come to agreement on how to proceed, or risk termination of the deal and a refund of their earnest money. We reviewed the appraisal report with the listing agent, and found that there was a justifiable reason the appraiser submitted the report as they did. We worked towards appealing the report to see if we could gain any momentum on a revision of the report, but the comparable properties that we found by that point likely wouldn’t have made any difference. We stated our case to the listing agent and sellers as to why they should drop the price point from the offer down to the appraised value. In this case, the sellers conceded and we wrote an addendum with a price revision. My buyers were very excited, and in this case, the appraisal ended up being a benefit to them.
This is certainly not always the case – it’s a negotiation, and while meeting in the middle is often times the result of a low appraisal, sometimes it works out that the motivations of all parties are a win-win to get the deal done.
I complimented my buyers on their ability to maintain a cool focus and keep their eye on the prize through the whole transaction. I believe that sometimes small concessions throughout the deal to maintain a good working relationship can have bigger impacts as a deal progresses. For Michael and Rebecca, this really paid off, and they’re on their way to closing today on their first home.
