Blog Buyer When a low appraisal can be a blessing in disguise

When a low appraisal can be a blessing in disguise

By Carson Mead, 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.

Carson Mead

Broker | ADU Specialist

My first introduction to the world of real estate came in 2004, when at the age of 22 I bought my first home in NE Portland with my sister. I still remember what a monumental life transition that was. Buying my own home laid the foundation for a lifelong love of all things related to houses. I enrolled in a year-long Building Construction program to gain more knowledge in housing systems and techniques. I have used those tools to enhance my own home both inside and out. I joke that my favorite part of a house is the basement, as that’s where I can see the health and maintenance of a home’s systems: plumbing, electrical, HVAC, foundation etc. While a home inspector is the professional on helping to understand the story of a home, I like to provide as much due-diligence as possible up front before you spend the money and get into contract. Ultimately my goal is to meet you in any endeavor that you are wanting to undertake. If you are looking to sell, I will develop a strategy that makes sense for you with your goals, timelines and marketing strategy. If you want to invest in your home before going on the market, we’ll look at what you can do to maximize your profit: be it refinishing floors, painting, modifying light fixtures, and getting it staged. If you need to stay in your home while selling, I’ll bring in my stager to help get perspective on how to pare down the feel of your home and have tangible goals to achieve in getting ready to go on the market. If you are looking to invest in Portland real estate, we can talk about the big four in analyzing properties. Rental income, principal reduction, equity growth and tax benefits. I work with spreadsheets to outline these assets so you can see the short and long term performance of your investment. Once last piece of my professional and personal life that I spend a lot of time thinking about are ADU’s (Accessory Dwelling Units). Also known as mother-in-law units and granny flats, these can be detached or attached. When I see a home, I look at the property in detail to see how the home is oriented on the lot and if it is ripe for a detached ADU (new construction), or if it is a good prospect for creating an attached unit (a basement apartment). I also look at the zoning to see what kind of potential this could add. I am in mid-process building my own detached ADU. The structure is going to be modern with clean lines and open concept. I live on a corner lot, which means the ADU can have it’s own street entrance. I also have zoning which will allow me to split the lot if I choose and sell it separately at some point. My plan is to keep it as a rental, but this will create a lot of flexibility both short and long term. I am a cooperatively focused broker, with a passion for helping people achieve their goals and succeed in their endeavors. I am patient, understanding, trustworthy, and truly care about your best interests. I serve on my neighborhood association board and the larger Northeast Coalition of Neighborhoods. Please let me know if you'd like to share a beverage, coffee, tea, beer/wine to talk about what’s important to you and see if it would be a good fit to work together. All the best— yelp
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