Maryland real estate agents
Due to the so called “Real Estate Bubble and Market Crash” many property values have been driven down tremendously. However, with the huge influx of buyers in some particular price ranges or locations these values are slowly starting to rise. Nonetheless, an appraiser must use the most recent comps and often times the appraisal may come in lower than the purchase price and/or loan amount. When this occurs there are two options: The seller can reduce the sales price accordingly, or the buyer can come up with the cash to offset the difference.
In most cases it’s as simple as this: Buyers don’t want to pay more than what a licensed appraiser determines the value of the property to be, so the seller will reduce the price because that’s all they can expect to sell their home for. Still, what if the seller or buyer thinks the appraisal is poorly done?
If both feel that the appraisal was poorly done than they can request a second one and then try to dispute the value with the bank providing their loan. Sometimes a second appraisal or dispute will raise the value, but not very often. If that happens and the seller refuses to reduce the price then the buyer has the option to come up with the difference in cash. For example: If the purchase price is $200,000 and the appraisal comes in for $190,000 the buyer has to come up with $10,000 IN ADDITION to the expected down payment amount. If the seller wont come down and the buyer wont come up with the cash difference, then the deal is dead.
If you’re obtaining financing for your loan then you will need to know the importance of the appraisal contingency and what exactly it pertains to. Speak with a loan officer to become more educated on all the financing steps that must be taken when buying a home. A real estate agent can help you best determine the value by running a CMA, but again, property values are rising in some areas and price ranges. As a buyer, if you feel an appraisal is low, but feel comfortable paying more than the appraisal amount, come up with the cash!
Ben White-Montgomery County Real Estate Specialist
Category : Blog