How do you handle stricter appraisal requirements?

1 Know your market

Before you make an offer on a home, do some research on the local market conditions and trends. Look at recent sales of similar homes in the area and compare them to the asking price of the home you want. This will give you an idea of how realistic the price is and how likely it is to appraise. You can also consult with your real estate agent, who can provide you with more data and insights on the market value of the home.

2 Be flexible with your financing

One way to deal with a low appraisal is to adjust your financing options. For example, you can increase your down payment, reduce your loan amount, or switch to a different loan program that has less strict appraisal guidelines. You can also ask the seller to lower the price, split the difference, or cover some of your closing costs. However, these options may not be feasible or desirable for you or the seller, depending on your financial situation and the market demand.

3 Consider appraisal contingencies

Another way to deal with a low appraisal is to include an appraisal contingency in your purchase contract. An appraisal contingency is a clause that allows you to walk away from the deal or renegotiate the terms if the appraisal comes in lower than the contract price. This can protect you from overpaying for the home or losing your earnest money deposit. However, an appraisal contingency can also weaken your offer and make you less attractive to the seller, especially if there are multiple offers on the table.

4 Communicate with your lender and appraiser

Finally, you can try to communicate with your lender and appraiser to resolve any issues or discrepancies with the appraisal. For example, you can ask your lender to review the appraisal report and see if there are any errors or omissions that can be corrected. You can also provide your lender and appraiser with additional information or evidence that supports a higher value, such as recent sales, upgrades, or repairs that were not considered in the appraisal. However, keep in mind that appraisers are independent professionals who follow strict standards and regulations, and they may not change their opinion unless there is a clear and valid reason.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?