As a real estate appraiser, I understand that homeowners may be surprised or disappointed when they receive a low appraisal. However, it’s important to note that appraisals do not always come in low. In fact, many appraisals accurately reflect the fair market value of the property.
That being said, it is possible for the contract price to be higher than the fair market value of the property. This can happen when buyers and sellers negotiate a price without taking into account all of the relevant factors that an appraiser would consider, such as recent sales of similar properties in the area, the condition of the property, and any unique features or amenities.
For example, let’s say that a buyer and seller agree on a price for a home that is significantly higher than the recent sales of similar properties in the area. If an appraiser is then brought in to determine the fair market value of the property, they may find that the agreed-upon price is not supported by the market data and the condition of the property.
In cases like this, the appraiser is simply doing their job by providing an unbiased and objective opinion of the property’s value. It’s important to remember that appraisals are not meant to be good news or bad news for either the buyer or seller, but rather an accurate reflection of the property’s fair market value.
If you do receive a low appraisal, it’s important to take a step back and objectively evaluate whether the contract price is truly reflective of the property’s fair market value. If it is not, you may need to renegotiate the price with the buyer or consider other options.
In conclusion, while it’s true that appraisals can come in low, it’s important to understand that they are not always the cause of a discrepancy between the contract price and the fair market value of the property. By understanding the appraisal process and working with a knowledgeable real estate agent, you can help ensure that you receive an accurate and fair valuation of your property.