You Sold Your Home In Multiple Offers, Will it Appraise?
The Fall market has calmed some from Seattle's height in the spring, yet the problem of low appraisals still exist for homes that sell in multiple offers. In general, the appraiser is looking to justify the price of your offer and not to exceed it. It's rare for the appraisal to come in higher than the contracted amount even in a rising market. In some neighborhoods there still have not been enough sales due low inventory levels, to justify the inflated price driven by multiple offers.
Whether I represent the buyer or the seller in this situation, it's always a drag when the home doesn't appraise, because it may cause the buyer to regret their price. In a multiple offer situation, the buyer's agent will often recommend that the buyers come in without an appraisal contingency or pre-agree to cover some portion of a shortfall, if the property fails to appraise.
This happened in a transaction I worked on earlier this year, where the buyer agreed in their original offer, to cover up to $15,000 in appraisal shortfall. As it happened, the home did not appraise, but was only $10,000 short. The buyers then had to come out of pocket an additional $10,000 and the loan proceeded as usual. If the buyer has cash, this can be an acceptable solution. If not, and without a pre-agreement, the buyer can request the seller drop the price and this can be where the deal falls apart or goes to the back-up offeror.
Whether you are a buyer or a seller, you want to consider appraisals when you price your home or make your offer. Always scanning previous sales in the neighborhood before making a move, will protect your interests. Let me know if you have any questions about your home's value. #QueenAnneLife