After getting pre-approval to buy your dream home, everyone expects to close the deal right away. However, the process is rarely ever that easy. Many buyers have to sit and wait for their lender’s home appraisal before they get the money to purchase the home. After all, they bear the risk in this investment. The home appraisal is there to ensure the money is not beyond the house’s actual worth.
That said, some home appraisals can end up with a value that is just much lower than the selling price or what you have offered. In this case, what should you do? Should you give up on the deal and move on? You could do that, but there are some things you can do before that.
1. Look around for errors
Appraisals are subject to error simply because they are not based on opinions. Instead, they are based on facts. Unfortunately, the lender or appraiser may make mistakes. Anything from an incorrectly written number to an inaccurate measurement can severely affect the appraisal, so make sure to examine the assessment thoroughly to see if the lender or appraiser made any mistakes.
2. Lower your original offer
If the appraisal is much lower than what you offered initially, there is a chance you may be able to lower your original offer. You will need to negotiate with the seller, and if you are successful, you may come up with a lower and fairer price. Keep in mind that if the seller does want to sell, they are left with no choice but to lower the price. As the buyer, you will not be approved for the money if the appraisal is lower than the home’s worth.
3. Make a bigger down payment
An excellent way to compensate for a lower appraisal is to make a larger down payment. For instance, if the appraisal amount is $5,000 lower than the original amount, you can add that amount into a down payment and adapt the loan request. By putting in your own $5,000, you can adjust it to the valuation by the lender’s appraisal.
4. Move on to another home
Sometimes, you cannot save a bad deal. All you can do is move on and find a new home. However, to ensure that you do not run into this problem again, make sure to do plenty of research and work with the right lender for a proper home appraisal. After all, you deserve a better deal no matter the outcome.
Unfortunately, many deals end up a lost cause simply because the lender’s appraisal showed the home to be of much lower value. However, do not let the situation demotivate you. Follow the tips we have shared, and you might just salvage the situation and finally purchase the home with a fairer and better deal!
If your efforts look like a lost cause, do not be afraid to cut your losses and keep looking. As much as you want to buy your dream home, it is never recommended to pay for a home higher than its actual value.
America’s Mortgage Solutions is a licensed mortgage provider in Palm Beach, Florida, offering mortgage solutions to home buyers, investors, and more. We ensure the proper financial support for every homebuyer and investor. If you are looking for the best mortgage lenders to help you buy your dream home, reach out to us today!