What Happens If the Appraisal Comes In Low on Your Livingston, TN Home Sale

I'm Bridget Salazar, OC Homegirl. I'm a REALTOR® with The Realty Firm and a Certified Residential Appraiser, and Livingston is my home base.

You accepted an offer. The inspection went fine. Then the lender's appraisal comes back under the contract price.

It happens on Tennessee sales every week, and it happens on well-kept houses. Around Livingston and the rest of Overton County it often happens for reasons that have nothing to do with how you cared for the place.

A low appraisal does not end a sale on its own. It starts a conversation. Here is what that conversation looks like, and who actually gets to decide what.

The appraisal is ordered by the buyer's lender, and it is done for the lender. You are not the client, and the buyer is not either.

The lender is deciding how much it will lend against the property. When the appraised value lands under the contract price, the loan gets sized off the lower number. A gap opens up between what the buyer agreed to pay and what the bank will fund.

That gap is the entire problem. Nothing about the house changed. The money available to buy it did.

How much of a gap a particular loan can absorb is a question for the buyer's lender. I am not a lender and I will not guess at it. What I can tell you is what the two sides usually do next.

Appraising a house in a subdivision full of similar houses is clean work. Appraising a house on fifteen acres with a shop behind it is not.

Out here the appraiser often has to reach further for sales. Further away, further back in time, or over to a property with different acreage and different buildings. Then every one of those differences gets adjusted for, and each adjustment is a judgment call.

Two careful appraisers can work the same rural property and land in different places. That is not sloppiness. It is what happens when no two places on the road are alike.

Acreage. Outbuildings. A lake view near Dale Hollow Lake. A long private drive. A layout nobody else has. Each one widens the range of defensible answers. How I measure all of it is on my home value page.

Once a gap opens there are a handful of moves. Which ones are available to you is set by your contract, not by local custom.

• The seller lowers the price to the appraised value.
• The buyer brings more cash to cover the gap, if they have it and their loan allows it.
• The two sides split the difference somewhere in between.
• Something other than price moves, like closing costs or repairs.
• The appraisal gets challenged through the lender.
• The buyer uses a contingency and the contract ends.
• The buyer restructures the loan, which is entirely a question for their lender.

Nobody is required to pick any of them. A seller can hold the price and a buyer can walk away. Whether that costs either side anything depends on what the contract says, so read it with your attorney before you answer.

A lender will consider what is called a reconsideration of value. It is not an appeal where you argue that the number feels too low.

What moves a reconsideration is new information. A closed sale the appraiser did not use and should have. A factual error in square footage, acreage, bedroom count, a building that got missed, or condition reported wrong. Something about a comparable sale the appraiser had no way to know.

It goes in through the buyer's lender with the sales and the facts attached. Feelings are not evidence and they get nowhere.

This is where my appraisal training earns its keep. I can read the report the way the person who wrote it reads it, see which comparable sales are carrying the weight, and tell you plainly whether there is anything worth challenging.

The best time to handle a low appraisal is before you list.

I price with the same comparable sales method I use as an appraiser, so the list price is a number the sales will stand behind. When I'm your listing agent, that number is a pricing opinion built with appraisal methods. It is not a formal appraisal, and those are two different assignments.

Then I give the appraiser something to work with.

• The square footage, and how it was measured.
• The acreage, and how much of it is usable.
• The age of the roof, the heat and air, the well and the septic.
• Every building on the place and what is in it.
• Permits and receipts for the work you did.
• The closed sales I relied on for the price.

A report is only as good as the facts handed to it.

Sellers can see the rest on selling your home in Livingston and on how I sell a home. Buyers sitting on the other side of this should read how I help buyers, and anybody buying for the first time can start with first-time buyers.

Call me, even if I'm not your agent.

I will read the report, pull the sales around Overton County, and tell you whether the number looks supportable or whether there is a case to put in front of the lender. Then you can decide what to do with a clear head instead of a deadline.

Questions about what your contract requires go to your attorney. Questions about your loan go to your lender. The contract sets the terms, and I will not pretend otherwise.

Send me a message or call (931) 510-1346. I answer every question.