What Happens When Your Home Appraisal Comes Back Low?

Published On: May 18, 2022|Categories: Blog, Home Sellers, Sellers|Tags: Home Appraisal Comes Back Low, What Happens When Your Home Appraisal Comes Back Low|

If you’re selling a home in Jasper or one of the surrounding communities, your buyer’s lender will most likely send an appraiser to your home. But what happens when your appraisal comes back low?

What Happens When Your Home Appraisal Comes Back Low?

Lenders typically send home appraisers to determine the value of a home before agreeing to let a buyer borrow the money. They do this because they don’t want to give a buyer more money than a home is worth; statistically, homeowners are more likely to default on their payments when their home isn’t worth what they paid for it. Appraisals help save lenders money and hassle.

With that said, it’s not uncommon for an appraiser to say that a home is worth less than what a buyer is asking to borrow to purchase it. When that happens, the lender may still offer to allow the buyer to borrow an amount equal to the home’s appraised value.

In situations like these, the buyer has three options. First, they can negotiate with you to lower the sales price. Second, they can come up with the difference in money on their own. Third, they can walk away from the transaction (and if their real estate agent built a home appraisal contingency into their purchase contract, they get their earnest money deposit back).

What Options Do You Have if Your Appraisal Comes Back Low?

If the appraisal on your home comes back lower than you expect, you may have a couple of options yourself. First, you can talk to your real estate agent about asking the appraiser – through the lender, of course – to take a second look. You and your real estate agent may wish to provide additional data that the appraiser may have overlooked the first time, such as other comparable properties, proof of improvements or upgrades, or other information.

You also have the option of asking the lender for a second appraisal. However, if you want a second appraisal, you’ll most likely have to pay for it yourself. Appraisals generally cost between $300 and $500, depending on several factors. You must also work with an appraiser that the bank chooses; you don’t get to pick your own appraiser. That’s because lenders have lists of trusted appraisers they routinely work with.

$2,500,000

1895 Gun Club Road Jasper, Indiana

7 Beds 8 Baths 12,729 SqFt 10.370 Acres

Listing courtesy of Brenda Krempp from RE/MAX Local.

$719,000

938 E Jasper Dubois Road Jasper, Indiana

5 Beds 4 Baths 5,700 SqFt 6.100 Acres

Listing courtesy of Kevin Bayer from RE/MAX Local.

$597,000

3289 St Charles Street Jasper, Indiana

4 Beds 4 Baths 3,906 SqFt 0.595 Acres

Listing courtesy of Annette Wigand from ERA FIRST ADVANTAGE REALTY, INC.

$559,900

1928 S A St. Jasper, Indiana

3 Beds 4 Baths 3,376 SqFt 6.258 Acres

Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.

$535,000

4382 E 300N Jasper, Indiana

3 Beds 4 Baths 4,100 SqFt 1.900 Acres

Listing courtesy of Gina Mehringer from F.C. TUCKER EMGE.

$510,000

5070 W Alder Creek Drive Jasper, Indiana

4 Beds 3 Baths 4,208 SqFt 1.500 Acres

Listing courtesy of Stephanie Hasenour from RE/MAX Local.

$464,000

4536 W 150 N Jasper, Indiana

4 Beds 4 Baths 2,986 SqFt 1.482 Acres

Listing courtesy of Stacey Thieman-Wright from THIEMAN REALTY.

$448,900

1525 Grandview Drive Jasper, Indiana

3 Beds 3 Baths 4,132 SqFt 0.354 Acres

Listing courtesy of Stacey Thieman-Wright from THIEMAN REALTY.

$435,000

844 Second Avenue Jasper, Indiana

3 Beds 2 Baths 1,572 SqFt 0.540 Acres

Listing courtesy of Josseline Carr from RE/MAX Local.

$420,000

3237 Dogwood Drive Jasper, Indiana

3 Beds 4 Baths 4,326 SqFt 0.675 Acres

Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.

$399,900

247 N Westlin Drive Jasper, Indiana

3 Beds 3 Baths 2,849 SqFt 0.999 Acres

Listing courtesy of Annette Wigand from ERA FIRST ADVANTAGE REALTY, INC.

$399,000

836 W 20th Street Jasper, Indiana

3 Beds 3 Baths 4,376 SqFt 0.590 Acres

Listing courtesy of Elizabeth Mehringer from RE/MAX Local.

$349,900

1245 W 6th Street Jasper, Indiana

4 Beds 3 Baths 3,610 SqFt 1.300 Acres

Listing courtesy of Steve Wigand from ERA FIRST ADVANTAGE REALTY, INC.

$339,700

872 S Countryside Drive Jasper, Indiana

3 Beds 2 Baths 3,498 SqFt 2 Acres

Listing courtesy of Linda Schroering from SCHROERING REALTY.

$339,000

3255 E State Road 164 Jasper, Indiana

4 Beds 3 Baths 2,944 SqFt 1.024 Acres

Listing courtesy of Zach Holt from Whitetail Properties Real Estate.

Do You Have to Give Your Buyer Their Earnest Money Back if Your Appraisal Comes Back Low?

If your appraisal comes back low and your buyer decides to cancel the transaction, you may have to give their earnest money deposit back. Usually, real estate agents write appraisal contingencies into their clients’ contracts, and those contingencies help prospective buyers hang on to their earnest money deposits in situations like these.

Are You Thinking of Buying a Home in Dubois County?

Use our site to search homes for sale in Jasper, Dubois, Spencer, Martin and Davis counties, as well as all the surrounding communities. Unlike the “big name” sites out there, at Sell 4 Free Welsh Realty, our site is directly connected to our local MLS. We update it with new homes every hour.

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