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.

$1,200,000

5 Bedrooms
6 Bathrooms
5,748 Sq Ft
8.870 Acres

1700 N Newton St. Jasper, Indiana

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Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.

$429,000

4 Bedrooms
3 Bathrooms
2,208 Sq Ft
0.660 Acres

1450 Saint Charles Street Jasper, Indiana

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Listing courtesy of Stephanie Hasenour from RE/MAX Local.

$400,000

4 Bedrooms
2 Bathrooms
3,490 Sq Ft
0.353 Acres

307 Newton Street Jasper, Indiana

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Listing courtesy of Tama Stemle from RE/MAX Local.

$336,000

3 Bedrooms
2 Bathrooms
1,502 Sq Ft
0.344 Acres

900 Juniper Court Jasper, Indiana

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Listing courtesy of Dara O'Neil from F.C. TUCKER EMGE.

$331,000

3 Bedrooms
2 Bathrooms
1,500 Sq Ft
0.280 Acres

924 Juniper Court Jasper, Indiana

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Listing courtesy of Kara Hinshaw from Key Associates Signature Realty.

$320,000

3 Bedrooms
2 Bathrooms
3,471 Sq Ft
1.740 Acres

582 E 36th Street Jasper, Indiana

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Listing courtesy of Sandra Cave from RE/MAX Local.

$279,900

3 Bedrooms
5 Bathrooms
2,867 Sq Ft
0.800 Acres

4180 Timberpoint Court Jasper, Indiana

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Listing courtesy of Melody Faulk from RE/MAX Local.

$265,000

2 Bedrooms
2 Bathrooms
1,331 Sq Ft
0.148 Acres

813 Dorbett Street Jasper, Indiana

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Listing courtesy of Jake Mauntel from American Dream Mauntel Realty.

$249,500

3 Bedrooms
3 Bathrooms
2,202 Sq Ft
0.850 Acres

2413 Scenic Court Jasper, Indiana

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Listing courtesy of Stacey Thieman-Wright from THIEMAN REALTY.

$225,000

3 Bedrooms
4 Bathrooms
2,400 Sq Ft
0.315 Acres

2316 Sunset Drive Jasper, Indiana

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Listing courtesy of Keasha Fromme from Carpenter Realty LLC.

$219,000

2 Bedrooms
2 Bathrooms
1,266 Sq Ft

901-2 Reyling Drive Jasper, Indiana

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Listing courtesy of Kara Hinshaw from Key Associates Signature Realty.

$219,000

4 Bedrooms
2 Bathrooms
2,100 Sq Ft
0.110 Acres

214 W 9th Street Jasper, Indiana

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Listing courtesy of Ruger Kerstiens from F.C. TUCKER EMGE.

$194,000

4 Bedrooms
2 Bathrooms
2,280 Sq Ft
0.130 Acres

610 E Fourteenth Street Jasper, Indiana

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Listing courtesy of Ryan Craig from RE/MAX Local.

$192,500

3 Bedrooms
2 Bathrooms
1,616 Sq Ft
0.191 Acres

1414 Main Street Jasper, Indiana

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Listing courtesy of Kevin Bayer from RE/MAX Local.

$189,000

2 Bedrooms
1 Bathrooms
1,146 Sq Ft
1.130 Acres

6142 N Old Rd. 45 Jasper, Indiana

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Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.

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.

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