A low appraisal can be a major flop for sellers and buyers. However, it doesn’t mean the end of the deal as there are quite several ways to remedy the situation.
Compensate for the Difference
Appraisals are formalities in the real estate as lenders want to make sure that they are not overpaying for a property that doesn’t worth the cost. If the appraisal came in low than the amount of purchase, you may compensate for the difference. Let’s say the difference is 10,000 CAD, you will have to pay the difference to push through with the deal. The infrastructure of the house diminishes every year, so it’s quite normal for low appraisals to happen.
Challenging the Appraisal
Since the appraisal of the property will be done by an individual, know that this procedure is quite subjective. If there is a huge difference from the purchase amount versus appraised value, it is good to challenge the appraisal. Make sure to be ready with receipts of all the renovations you have done with promo codes and other equipment you have installed on the property. Challenging the appraisal could be paying another fee for the appraisal. But if you’ll consider the possibility of an error from the previous appraisal, this fee is worth paying.
Be Open for Negotiations
A low appraisal is not the end of the deal unless both parties already threw in the white flag. Buyers and sellers can negotiate until they come up with a fair solution. If the buyer is working with a lender, this could be tough. But be open for negotiation. Let say the property is undervalued in the amount of 20,000. Try to offer to lower the selling price by 10,000, so you and the buyer can meet halfway.
Consider Other Selling Alternatives
If the appraisal came way too low than expected, consider other selling alternatives. You can find third-party companies to sell it to which don’t require an appraisal. These third-party companies will pay you and wait for the market price to go up before opening it up for selling again.