What happens when an appraisal comes in below agreed upon value Hi? I’m Jeff Chubb with EXP Realty. We’re here with Jason Bonarrigo of RMS mortgage and make sure that you stick around to the end of the video to find out what we’re going to do with 1 000.
So Jason first off tell me what exactly is an appraisal? Oh, an appraisal is essentially what we do to certain lenders to certify the value.
Obviously, we want to make sure that we’re lending the right amount on a market value that’s been certified by a third party.
Okay, so what happens? Is this deal completely dead if that value that has been certified by that third party comes in below agreed upon value, So let’s just make up some numbers.
Let’s say we were under agreement for 500, 000 Appraisal came in at 480.
Are we done? No, no.
The good news is no, I mean.
Obviously it depends and I could talk for hours upon the differences, but it really just means that we kind of go back to the negotiation table.
Okay.
So what’s my first option? The first option for the buyer – and I think we’re talking about the buyer here in this sense – is that they obviously could just make up the difference in cash Okay, so If they have the ability to so So, first option make up that difference in Cash, But it doesn’t always necessarily mean that I have to bring the cash Like in that case, the 480 to 500 doesn’t necessarily mean I have to bring the extra 20 grand The extra 20 grand no, of course, not And again what I Meant by the differences is obviously one client or one borrower could put down 5 and one could put down 50. The guy who’s putting out 50 has a lot more options and it’s not really going to impact the financing as much.
So we’re going to talk to each individual on a different idea, So he can kind of restructure the deal.
A little bit, Of course, Probably not bring that 20 000, But, like you said the guy who’s putting 5 down probably would have to go.
Then? We? 39? D? Have? To? Have? Make? Up? The? Difference? Or? We? Can? Talk? About? Renegotiation? With? The? Buyer? And? The? Seller? Well? And? So? That? 39? S? Option? Two? Right? Of? Course? So? Where? In? That? Case? The? Seller? Would? Go? Down? To? 480? 000? Right? Yes? Or they would, as you know, you would go back to that listing agent and say hey.
This is what we have.
This is the appraisal.
What do you think, Depending on the market and who has kind of more leverage in that situation, but hopefully, as we’ve seen in the past, most parties come together and what usually happens is they meet in the middle Right So option? One is I, as the buyer come to the table with 20 000 Just make up the difference Option two is the seller comes down 20.
000.
To that 480 000 example right Or option three is: maybe we meet in the middle or something else? Maybe it’s 490.
I bring 10 grand 10 and 10 And the seller comes down 10 000 And then I think the fourth option is well. We can’t make this work, So you know have a nice day.
We can walk away right And usually you try to get that before the right after the purchase and sales, so you have some flexibility there Right, Okay, so make sure that you stick around and check out our videos.
What actually happens when an appraisal comes in above agreed upon price? This is what happens when the value comes in below agreed upon price, and what are we going to do with that thousand dollars So, but first Jason? Where can they find you Jason Bonarrigo RMS? Mortgage 617, 413 5038 And I’m Jeff Chubb my team, the Chubb Homes Team, we’re brokered by eXp, Realty 617, 480 2600 or find us online boston2 com.
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