Friday, July 8, 2016 / by Jason Huerkamp
There is nothing more frustrating than finding your dream home in this hot market and then the appraised value does not match the selling price of the home. This would be a great time to be working with an experienced real estate agent, one who knows the local area really well, someone who is familiar with what has sold, what is for sale and what is happening in the market place. But lets take a look at your options should this happen.
Your Agent will be pivotal in establishing what comparable properties the Sellers Agent used to get to the selling price of the property. Then the next thing to do would be to find out if the comparable properties the appraiser used were current and similar. Your agent would try and make contact with the appraiser and have a conversation with him about the comparable properties he used to get to his valuation and then to offer to send through some supporting documents of recently sold homes and under contract prices in the area, if that information is available. Sometimes they will amend their figures but often its not to be. You can ask for a second opinion and get another valuation but you may find that its going to be difficult.
If you cannot get the appraiser to lift his figures, your experienced buyers agent will approach the seller’s agent and begin renegotiating the terms of the contract. The reality is, that if your dream home appraised lower than the selling price the seller will have a hard time trying to get his price and subsequent appraisal even if he takes a different buyer. So you may have the opportunity to get your home at a lesser price. That would probably be the best and most appropriate action and outcome.
If there is a small enough gap in the price and the appraisal, you may want to put in the extra cash and move forward with the transaction. The chances are fair that you would be living in the home for a period of time and your investment would grow in value and surpass the purchase price.
If that is not possible for you to add the extra cash to the transaction, sometimes the four parties in the sale, the seller, the seller’s agent, your buyers agent and you will work together to make it easier for you to get the house. If each party gave a little - on fee’s, the purchase price, and you added in some cash, this could be a win win deal for everyone. Of course changing the purchase price could affect the appraisal and it would mean a whole new contract and structure. Most agents and sellers would like to make the sale work and at least half the time this option can close the deal.
At the end of the day it may be best to move on and find another home that meets your needs, a home that your lender is confident about the price on the property and the appraisal. Be guided by your buyers agent. They are there to give you the facts and be your sounding board for making decisions about any property.
When you are considering buying a home you want to be working with agents that have the experience, the local knowledge and who are creative thinkers when it comes to financing. That is why you should choose a team like ours to be your representative.
When it comes to buying or selling a home, the Huerkamp Team have the experience and the know how.
The Huerkamp Team are your real estate specialists in the Twin Cities and surrounding communities of Minnesota. We are ranked in the top 1% of agents nationwide! The Team is dedicated and experienced in the Twin Cities real estate market and look forward to being your real estate time for life! You will have a great experience buying or selling real estate.