One of the agents in my office asked me, "What do I do about the low appraisal?" What is happening is a feeding frenzy in our low price market. All of the comps were $380,000 and the price of the home was $410,000 and the highest offer of 6 was $426,000.



Well we all know that the appraisal will and did come in low so:

What do I do with the low appraisal?

Check your numbers and always meet the appraiser. Remember the first person willing to pay the price asked is the new buyer. Have good comps with you. In a lot of instances the law may not allow you to meet the appraiser. Then be ready to talk and show the comps to the lender if needed.

If there aren't any, "What do I do with the low apraisal?" If you have 1 accepted offer and 5 backup offers work the one you have accepted. Ask if they can bring in extra money to close the purchase. If not check with the backup people and see if any of them will be able to bring money to close the transaction.

What if I only have one offer? Negotiate, Negotiate! I hope you know how to negotiations should work. There are many possiblities among them is the buyer comes up with some of the money that is beyond the appraisal and the seller reduces the amount of the property to make up the difference. If it is an REO or a Short Sale see what the bank will do.

When the markets correct this is not an unusual problem at the point of the change. If properties are going up again after a month or two after enough properties get into the system the appraisers will be able to reflect the new market. Change can be a difficult situation.