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).
Related: 5 curb appeal tricks all sellers should use
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.
- 5 Bedrooms
- 5 Bathrooms
- 5,596 Sq Ft
- 0.890 Acres
3265 Foxridge Drive Jasper, Indiana
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Listing courtesy of Brenda Krempp from RE/MAX Local.
- 3 Bedrooms
- 2 Bathrooms
- 2,940 Sq Ft
- 14.820 Acres
1089 N 400W Jasper, Indiana
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Listing courtesy of Zach Holt from Whitetail Properties Real Estate.
- 4 Bedrooms
- 4 Bathrooms
- 3,906 Sq Ft
- 0.595 Acres
3289 St Charles Street Jasper, Indiana
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Listing courtesy of Annette Wigand from ERA FIRST ADVANTAGE REALTY, INC.
- 4 Bedrooms
- 3 Bathrooms
- 3,150 Sq Ft
- 5.896 Acres
5757 W 700 N Jasper, Indiana
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Listing courtesy of Brenda Krempp from RE/MAX Local.
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- 1.300 Acres
1245 W 6th Street Jasper, Indiana
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Listing courtesy of Steve Wigand from ERA FIRST ADVANTAGE REALTY, INC.
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3515 Villa Drive Jasper, Indiana
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Listing courtesy of Leanna Graves from RE/MAX REVOLUTION.
- 4 Bedrooms
- 2 Bathrooms
- 3,490 Sq Ft
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307 Newton Street Jasper, Indiana
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Listing courtesy of Tama Stemle from RE/MAX Local.
- 3 Bedrooms
- 2 Bathrooms
- 2,374 Sq Ft
- 1.740 Acres
582 E 36th Street Jasper, Indiana
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Listing courtesy of Kara Hinshaw from Key Associates Signature Realty.
- 3 Bedrooms
- 2 Bathrooms
- 1,717 Sq Ft
- 0.348 Acres
1737 1st Street Jasper, Indiana
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Listing courtesy of Sandra Cave from RE/MAX Local.
- 4 Bedrooms
- 4 Bathrooms
- 2,961 Sq Ft
- 0.294 Acres
333 Daisy Lane Jasper, Indiana
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Listing courtesy of Linda Schroering from CENTURY 21 SCHROERING REALTY.
- 3 Bedrooms
- 3 Bathrooms
- 2,388 Sq Ft
- 0.329 Acres
233 Daisy Lane Jasper, Indiana
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Listing courtesy of Brenda Krempp from RE/MAX Local.
- 5 Bedrooms
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1780 Sweet Gum Drive Jasper, Indiana
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Listing courtesy of Amanda Childers from Hawkins & Root Real Estate.
- 2 Bedrooms
- 2 Bathrooms
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- 2.215 Acres
1818 Newton Street Jasper, Indiana
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Listing courtesy of Leanna Graves from RE/MAX REVOLUTION.
- 3 Bedrooms
- 2 Bathrooms
- 3,232 Sq Ft
- 0.520 Acres
3508 N 600 W Road Jasper, Indiana
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Listing courtesy of Caroline Gobert from ERA FIRST ADVANTAGE REALTY, INC.
- 3 Bedrooms
- 2 Bathrooms
- 1,392 Sq Ft
- 1.120 Acres
7182 N Portersville Road Jasper, Indiana
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Listing courtesy of Michael Fisher from 4Realty, 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.
Related: How to improve your bathroom to sell your home
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3 Beds 2 Baths 1,392 SqFt 1.120 Acres
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