Over at The Lending Group, we are pleased to chat about an important topic that may start to become more common. It comes in the question - what should you do if your appraisal comes in lower than the purchase price? As you probably know, we are in a seller's market right now. Most properties are getting up to six or more offers without being on the market for even a few days, sometimes less. This makes running into an appraisal problem even more critical. Hopefully, you will never have to experience this discouraging scenario. If you’re new in the market, or even facing this issue, we’ve outlined a guide for you in four easy steps below.
Trust In Your Real Estate Agent
Your realtor should always be your number one source of information and assistance. They will review other sales in the property, to see if anything may have been missed. Details like square footage or room count should be checked. Also, compare it to listed prices at other homes in the same area. Although the chances of that happening are not very big, it is still possible. There could be errors or comparable sales supporting a higher price. Still, it’s always best to talk to your agent and lender about this possibility.
Explore All of Your Financing Options
Knowing your finances is essential when looking at a home. You want to know what you can afford and how much money you have available for a mortgage loan. In addition, check if there are any reserves in order to help purchase the house. Another option could be a gift from relatives or friends.
Don’t Hesitate – Make That Offer
The third tip is to make sure you are ready to act. The market has been moving quickly, and sellers have a lot of offers. The rise in interest rates has led to a faster pace of transactions, so make sure that your loan rate lock doesn't expire before you can complete the offer process. We recommend you do it within a day, at most two days, and make a fair offer. We always want to try to get the best deal when purchasing property, after all buying a new house can be very emotional. As much as possible, try to think of this as any other business transaction by making an offer that is fair-minded.
Always Keep Your Agent in The Loop
After completing those three steps, get in touch with your real estate agent. Make sure to let them know your decision as soon as possible so that they can take it forward from there. The sooner you decide, the better it is for all involved. However, it is very important to make sure that you have done all the due diligence required at each and every step of the process. This way, you will know that the home you are buying is a good investment.
Please reach out for more information and see how we can help you get through this chaotic market. It is possible to find the perfect home, and it would be an honor to help you along the way.