AVOID THIS APPRAISAL TRAP WHEN SELLING YOUR HOME

If you are planning to sell your home or know someone who has sold in this market, chances are you’ve heard about home buyers offering appraisal gap coverage. In simple terms this means that if the appraisal on your house comes in low the buyer will make up all or some of the difference in cash to help their offer stand out and be the lucky winner! Here is where I give you a disclaimer: I’m not a lawyer and can’t give legal advice. Now that I have that out of the way you really need to be aware of what you are signing. What you don’t want to have happen is to get multiple offers on your house for $50,000 over the listed price and then end up with a final sale price that is $5,000 less than the original list price. Let me explain. If your house was listed at $300,000, you accepted an offer at $350,000 with this language like “Buyer and seller agree that the buyer is to pay $5,000 over the appraised value if the appraised value comes in under the purchase price” in the purchase agreement and the appraisal comes in at $290,000, it looks to me that you just sold your house for $295,000. If you don’t think an appraisal could be that far off, think again. It’s happened and we’ve been able to correct it back to the price it sold at in multiple offers, but it’s not where you want to be as a seller. What I really want you to understand is that you need to protect yourself in this market. Getting a good price is one thing. Keeping it that way until it closes is another. The good thing is if you hire me to sell your house you are getting 50,000+ hours of real estate experience on your side to keep your equity safe.