Well, there are several options here. 1. The buyers can still accept the property at the sales price you had agreed to. 2. The buyers can ask you to reduce the price to what the appraisal has reported. 3. The buyers and you can renegotiate the price, maybe split the difference. 4. You can request another appraisal. 5. You can walk away from the deal.
First one is easy. The second and fifth depend on some tough calls from you. I know that it’s tough to reduce the sales price once you have agreed to it, and if you walk away from the deal, there is no guarantee you will not be faced with the same situation again with the next buyers. The third depends on both you and the buyers. How badly the buyers want the home and how badly you want to sell it. The fourth, you can request another appraisal. Whereas the first appraisal was paid by the buyers, this one you will have to pay for. An appraisal is an opinion based on what recently sold properties in your area (comps) an appraiser uses to establish your home’s value. So, for example, a different appraiser may use different comps and come up with a different value. But you will still have to have the buyers and/or their mortgage company agree to this new value, if it is in your favor. This is not always easy.
Bottom line, as mentioned, you have several options. It will really come down to how aggressive you want to be in selling your home. How much are you willing to negotiate on the previously agreed sales price, if need be. I always tell my clients, when a sales contract is originally signed, don’t start cashing that check yet. Appraisals and home inspections, which are common with real estate transactions, may create a situation where you have to revisit the sales price. And, sadly, from a sellers’ perspective, new negotiations will tend to drive the original sales price lower, not higher.
