For both Farragut buyers and sellers, by the time that the transaction gets to the point where the appraisal is ordered both parties are heavily invested. A low appraisal can be damaging to both Farragut buyers and sellers. In this post, we’ll look at why Farragut appraisals can come in low, what happens when they do, and what can be done to prevent it from happening.
Why Do Farragut Appraisals Come In Low?
There are a whole slew of reasons why appraisals can com in low. Here are a few common reasons why:
-Multiple offers that cause the price to be artificially inflated.
-Overpricing by the seller.
-Lots of shorts sales and foreclosures that cause the comparables to be lows.
-Lack of comparable homes due to lag from slowly rising home prices.
What Happens When A Farragut Appraisal Is Low?
From time to time, Farragut appraisals do come in low. When that does happen, both the buyer and seller have a few choices of how to proceed. First, when a Farragut home for sale has a low appraisal, an easy fix is to renegotiate the price. While some sellers may not want to lower the price, if they walk away from the sale, they could always receive a low appraisal when they find another buyer. Another option that a buyer can have is to make up the difference in cash. Lenders are only concerned with the loan-to-value ratio, so it the buyer makes up the difference it isn’t a big deal. Another option is that the buyer can find another lender, in hopes that they appraiser they use will come up with a different price. Finally, if there are no other options, both parties have the choice to walk away from the sale.
So…How Do You Prevent A Low Appraisal?
For both buyers and sellers, the best thing that can be done to prevent a low appraisal is to truly investigating what other Farragut homes are selling for. For sellers, a real estate professional will be able to provide you with a list of comparable before putting your home on the market. It should be able to give you a realistic price range for your home. As a buyer, your agent will also be able to provide you with some guidance when writing an offer. For both buyer and sellers, it can be extremely helpful to have a grasp on comparable homes in the area. It will also (hopefully) prevent any appraisal issues. After all, a home will only sell for its current market value.
Are you thinking about buying or selling a Farragut home? Please let us know if there is any way Knoxville Home Team can assist you. You can contact Rick at 865-696-9002 or via email at [email protected]. You can contact Kati at 865-392-5880 or via email at [email protected].