The home sales process is lined with pitfalls that can set back or completely derail the sale of your Lakeland, Florida house. One of the biggest pitfalls is a failed appraisal inspection. The two main problems that can surface are your home’s appraisal coming in below the sales price and safety or repair issues with your house.
Below, we’ll recommend some solutions for the two major appraisal issues. But first let us remind you that buyers are required to pay for an appraisal as part of their mortgage application, and since most buyers need a mortgage to buy a house it will be impossible to sell your house without passing an appraisal inspection.
An appraisal is required by the buyer’s lending institution to determine the home’s fair market value. This way, the lender can ensure the amount of money it lends to your buyer for the home does not exceed its value.
What can I do if my Lakeland, Florida house has under appraised?
It is disheartening when you sign a sales contract, estimate your profit and plan your next move only to find out weeks later that your house has not appraised for the agreed upon sales price.
Depending on the difference between the price you agreed to sell your house and the appraised value, it can be a minor monetary loss or could derail the sale for good.
We have listed several steps you can take to resolve an appraisal value issue, from those that will not cost you a penny to the ones that will have the greatest economic impact.
CONTEST THE APPRAISED VALUE
If you feel that the appraiser is wrong and you have data that can back up your sales price, then you can try to contest the appraised value via your real estate agent.
Your agent may have a working relationship with the appraiser. With credible information about off market comparable sales, he may convince the appraiser to reconsider the appraised value.
ASK THE BUYER TO PAY FOR THE DIFFERENCE
You can ask the buyers to pay the difference between the appraised value and the contract sales price at closing.
There is an outside chance your buyers may be willing to pay more for the house, especially if you are in a sellers’ market where prices are rising rapidly.
It may be worth it for your buyer to increase the price and close on your house now, rather than spending months looking for a new house in a tight market, only to have to pay more in the future.
NEGOTIATE WITH THE BUYER TO MEET IN THE MIDDLE
If you are unable to convince the appraiser to reconsider the appraised value and you are in a slow sellers’ market, you can ask the buyer to meet you in the middle.
You can show the buyer you are reasonable by reducing the price of the house by half and request the buyer to increase his offer by 50%.
NEGOTIATE WITH YOUR AGENT AND BUYER
If the above step fails, then you can reduce the price by a 1/3, ask your real estate agent to reduce their commission by 1/3 and request the buyer to increase their offer price by 1/3.
Most agents will refuse to reduce their commission and many real estate brokers have a standard company policy not to negotiate commissions.
Nonetheless, with the possibility that your agent may lose the full commission, he may be willing to work with you.
LOWER THE SALES PRICE TO THE APPRAISED VALUE
As a last resort, if you want to sell your house and a reduced sales price will not keep you from moving on with your plans, then you will have to reduce the price of your house.
What can I do if an appraisal report requires major repairs?
An appraiser will not only look to establish the fair market value of a property but also to require repairs or inspections when they spot potential health, safety and system or structural problems.
Fortunately, most repair issues that concern appraisers are minor. Occasionally however, an appraisal report may point out a major plumbing, electrical or structural problem.
In these cases the appraisal is normally subject to the repairs being completed or the issuance of a satisfactory report by a certified home inspector.
One sure way to sell your house, even if there are major repair issues is to avoid the appraisal entirely. You can do this by selling your house to a “we buy houses for cash company” such as Lakeland Home Buyers.
Our ability to purchase Lakeland houses for cash helps us avoid the need for bank appraisals and home inspections, which means you can sell your house “as is” without the usual headaches of selling your house the traditional way.
What’s more, we can give you an on-the-spot offer on your house and close in as fast. Call Lakeland Home Buyers at 863-372-8937 to have your home sold by tomorrow.