When undergoing an appraisal as a buyer, there are different outcomes you can expect based on the valuation of the property. Here's what you can anticipate in each scenario:

1. Low appraisal value: If the appraisal value comes in lower than the agreed-upon purchase price, several things may happen:

• • Financing challenges: If you are relying on a mortgage loan to finance the purchase, the lender may refuse to lend the full amount based on the appraised value. This can result in a financing gap that needs to be addressed.
  • Renegotiation: You can negotiate with the seller to lower the purchase price to match the appraised value. This allows you to secure the financing you need without needing to make up the difference in cash. Alternatively, you can negotiate other concessions from the seller, such as repairs or credits, to offset the lower appraisal value.
  • Re-evaluation: If you believe the appraisal is inaccurate or flawed, you may request a reconsideration or a second appraisal. However, this depends on the lender's policies and your ability to present strong evidence to support your claim.

2. Appraisal at the agreed-upon value: If the appraisal comes in at the same value as the agreed-upon purchase price, it means the property is appraised for the expected amount. In this case:

• • Financing: You can proceed with the mortgage financing based on the appraised value without any additional complications.
  • Confidence in the purchase: A matching appraisal value can provide reassurance that you are paying a fair price for the property, aligning with the agreed-upon terms. Also appraisal is one of the last steps in the real estate contract process. With an appraisal at value you can start to have confidence of closing and start to coordinate the move!

3. Appraisal above the agreed-upon value: In the event that the appraisal comes in higher than the agreed-upon purchase price, a few things can occur:

• • Financing: The lender typically bases the loan amount on the lower of the appraised value or the purchase price. While a higher appraisal value is beneficial, it may not directly impact your loan terms unless you decide to adjust the purchase price accordingly.
  • Equity and negotiations: A higher appraisal value could mean instant equity in the property. You can leverage this position to negotiate better terms with the seller, such as a lower purchase price, repairs, or other concessions.

It's important to note that the specific outcomes may vary depending on your contract terms, lender requirements, and the negotiation dynamics between you and the seller. It's advisable to work closely with your real estate agent and lender to understand your options and navigate the situation effectively based on the appraisal results. Ultimately communication with your lender, agent, and all parties of the contract is extremely important and can lead you into a successful position to close on the home of your choice!