By Samantha DeBianchi
SEATTLE (Zillow) — Whether you are buying or selling, waiting for an appraisal to come back can be a nerve-racking process, especially in an economy in which home values are not what they used to be, despite the perceived value of a home. Because there are great deals out there and prices are increasing, buyers and sellers need to make quick decisions when the appraisal doesn’t make the cut, and it’s important to be prepared in advance for this scenario.
With this in mind, here are the three main steps to take when the appraisal comes in low:
Read the report for accuracy
Appraisal reports can be long, complicated documents, but they can be very revealing if you take the time to read them thoroughly. Make a note of anything that looks off, and verify that the information is correct, not only for the property itself but also for the comparables. Confirm that all comps are accounted for – some may not be listed on the MLS and your real estate agent will have to research. Your agent will work with the buyer’s mortgage professional to ensure the information is relayed to the appraiser.
While there is no guarantee the report will change, it certainly helps to clarify any errors and understand why an appraisal came in low. Appraisals also point out if there are secrets lurking within the property’s walls, such as unpermitted additions that add square footage but cannot contribute toward the property’s value. For this reason it’s important that sellers are honest and upfront from the beginning and that buyers do their research before making an offer.