If you’re in the market for a new home, you may be feeling overwhelmed by all of the details you’ll need to consider before you sign any papers on your dream house. One of the most often overlooked details is the gap that can exist between a home’s value based on its appraisal and the sales price set by the seller and their realtor.
Not sure how to go about navigating an appraisal gap? Let’s take a closer look to make your experience purchasing real estate in Eustis, Florida, smoother and more successful.
Appraisal Gaps Explained
To understand what an appraisal gap is, you must understand what an appraisal is and why it matters. A home appraisal is a thorough evaluation of a property before its sale to determine its accurate market value.
An appraisal considers all the details of the property’s condition as well as the values of comparable homes in the area.
Most lenders require their clients to get an appraisal on their desired home to make sure that the amount borrowed doesn’t reflect an unfair sales price. However, even if you get an appraisal for the home you want to buy, it doesn’t mean the seller will use the appraised value as the sales price.
This scenario can result in an appraisal gap, in which the appraised amount and the sales price don’t match — and the sales price is often higher than the appraised value.
What to Do When the Appraisal Is Lower Than the Offer for Eustis, Florida, Homes for Sale
An appraisal gap can be an awkward situation for home buyers looking for Eustis, Florida, homes for sale, but there are a few ways you can go about managing such an outcome.
Dispute It
If you think that the appraisal price may be inaccurate, you can dispute the appraisal and ask for a reconsideration of the home’s value. You’ll need to make your dispute in writing and submit it to the appraiser.
Keep in mind that this will require evidence such as proof of incorrect home value comparisons on the appraiser’s part, missed upgrades or features on the property in question, mistakes in the appraisal report, or an incomplete inspection of the home’s exterior.
Renegotiate Your Offer
If you believe that the appraisal value is correct, but the seller is still asking a higher price, you can start by simply asking the seller to lower their price to match the appraisal.
If the seller refuses but you still want to purchase the home, they may agree to split the difference between the appraisal and their asking price.
Walk Away
At the end of the day, if the sales price on your desired home and the appraisal value aren’t matching up and you don’t want to lose too much money on your purchase, the best choice of action might be to walk away and find another property that’s selling for a better value.
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