Do sellers usually lower prices after appraisal?

Asked by: Dr. Cicero Grant  |  Last update: March 7, 2025
Score: 4.8/5 (62 votes)

Do sellers usually lower their asking price if the appraised value is lower? Whether the seller decides to lower their asking price will depend on a number of factors, including how motivated they are to sell or if they have other offers above asking price.

How often do sellers lower prices after appraisal?

Real estate experts estimate between 10-20% of appraisals come in lower than the sale price. But in today's competitive housing market, more homes are selling with multiple offers and the chances of an appraisal gap is increasing. When there is an appraisal gap you have five options. Renegotiate the deal.

Do appraisals usually match the selling price?

The appraiser's primary role is to determine the fair market value of the property based on objective factors such as its condition, location, comparable sales, and market trends. The appraised opinion of value may be the same or very close to the contract price however, it may also be considerably higher or lower.

Is low appraisal worse for buyer or seller?

Why would the buyers agent support the price with the comps, that's the listing agents job. If the appraisal comes in low, that's generally better for the buyer, as in most cases they'll get a better deal with a price drop to meet the appraised value.

Can seller change price after appraisal?

Can a home seller change the price after a contract is signed? No. Typically, when a seller wants to back out of a contract, it's because the house appraised much higher than the offer and the seller wants a do-over. Unfortunately, at that point, you'd be legally obligated to go through with the under-contract buyer.

How Often Do Home Appraisals Come in Low?

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Can seller negotiate after appraisal?

The seller is bound by the contract.

Just because the appraisal shows the seller may have underpriced their property, they don't have the right to walk away from the deal.

Do houses usually appraise above selling price?

Most appraisals come in at the right price. According to a report by Corporate Settlement Solutions (CSS), only about 8% of properties sold in the first half of 2024 sold for more than their appraised values. The biggest appraisal gap occurred in April 2022, when 20% of homes appraised for less than their sales price.

Can seller back out if appraisal is low?

A sales contract with a kick-out clause allows you to continue marketing and showing the property. If by the kick-out clause date you find another buyer willing to pay the sales price despite the lower appraised value, you can 'kick out' the original buyer and accept the new offer.

Can I ask for lower price after appraisal?

If an appraisal comes back low, a buyer can go back to the seller and negotiate a lower sale price or walk away from the sale entirely. For the buyer and seller to both get what they want – a home that sells – the seller may seriously consider lowering the price.

Why do appraisers lowball?

Overpricing: Ongoing shifts in the market, several recent foreclosures in the area or the presence of many distressed homes can affect the value of a home. Sometimes without sellers even realizing it. So if they overprice their homes, the appraisal value is bound to be lower than expected.

Do appraisers know the offer price?

The appraisers know what the listing price was and what the contract price is. If they do, does that mean that you got a fair price for the house, or is the appraisal basically just a meaningless formality? The appraiser doesn't work for you, they work for the bank.

Do appraisals usually come back low?

If you're wondering how often home appraisals come in lower than a home's asking price, you'll likely be happy to find out that it's fairly rare. On average, only 10% of home appraisals fetch a lower number than the asking price.

Does the seller see the appraisal?

The seller often does not generally get a copy of the appraisal, but they can request one. The CRES Risk Management legal advice team noted that an appraisal is material to a transaction and like a property inspection report for a purchase, it needs to be provided to the seller, whether or not the sale closes.

What happens if an appraisal is lower than an offer?

Appraisal is lower than the offer: If the home appraises for less than the agreed-upon sale price, the lender won't approve the loan. In this situation, buyers and sellers need to come to a mutually beneficial solution that will hold the deal together — more on that later.

What negatively affects home appraisals?

Poorly maintained homes or foreclosures have been known to drag property values down significantly. Their negative impact on appearances and security concerns will be taken into account when assessing area desirability levels.

How long does it take to get an appraisal back?

Appraisals generally take 1 to 2 weeks, but can take as long as 4 weeks in a busy real estate market. The biggest reason for appraisal delays is lack of appraiser availability. The number of available appraisers is declining 3% each year.

What is an aggressive offer on a house?

An aggressive offer is more than the price. A good buyer's agent will know how to sell your aggressive offer. More importantly make sure you chose an agent who will aggressively sell you as the best buyer in any market or price range.

What happens if the seller won't negotiate after an appraisal?

If the seller won't negotiate a lower price, you'll be on the hook to pay the difference unless you have an appraisal contingency in your contract.

What happens if sale price is higher than appraisal?

There's often an addendum that allows buyers to back out without losing their earnest money deposit if the appraisal doesn't match the offer price. If the sellers stand firm and don't want to budge on price, the deal might fall through, sending the buyers back on their search for the perfect home.

Do sellers have to lower price after appraisal?

Issues For The Seller

However, if the appraisal gap is significant or you need to sell quickly or the housing market has cooled, it may be a sign that you need to negotiate with the buyer or lower your asking price.

Who gets the appraisal report first?

Buyers get the appraisal report close to the closing date (at least 3 days before closing day). After the appraiser inspects the home, he submits the appraisal report to the lender. The lender reviews the report and will send it to the buyer.

Can I walk away if the appraisal comes in low?

Yahoo Finance tip: Your purchase contract must include an appraisal contingency, which states you can back out if the appraised amount is too low. Otherwise, you will forfeit the earnest money you put into the deal if you walk.

What happens when seller ask for more than house is appraised for?

You can sell a home for more than the appraised value — but it's not ideal because it can cause financial problems for the buyer. Therefore, listing your house above the appraisal amount may significantly limit the number of potential buyers for your home.

What happens if your home appraisal comes in high?

If a home is appraised to be higher than the asking price, the lender will only issue a mortgage for the appraisal amount. This leaves the borrower to either cover the remaining cost on their own or return to searching for a home with a listed price that matches the appraised value.

Does appraisal have to match sales price?

This isn't necessarily true. Not only must an appraiser ensure that the home is habitable before the loan can close, but any discrepancy between a home's appraised value and sales price will be the responsibility of the buyer.