Appraisals that come in lower than the agreed-upon sales price are a source of frustration for home buyers, sellers, and real estate professionals, as they can quickly derail a deal.

If an appraisal comes in 10 percent lower than the agreed-upon sales price, for example, a bank will likely only agree to finance the lower value, which means either a buyer must make up the difference, a seller must come down on price, or the deal falls apart.

Homes for sale in declining markets are particularly ripe for appraisal problems. On standard appraisal forms, there’s a box that even says “declining value,” meaning falling home prices in the area, which will likely cause banks to slash another 5 percent off the value too, says mortgage broker Gloria Shulman, founder of Centek Capital Group in Beverly Hills. Foreclosures, which often sell for about 30 percent less than non-foreclosures, are also complicating appraisals when they’re inappropriately used as comps, agents say.

In some cases, a realtor can be successful in helping their clients get an adjustment on an appraisal, particularly when they can show that the comparable sales used were not good similarities to the property for-sale.

Most often, to save the deal, agents are finding it takes renegotiating the sales price. For example, with a townhome sale in Roxbury, N.J., the buyers say the appraiser failed to take into account all the upgrades in the home they wanted to buy, which caused the townhome to appraise for 3 percent lower than the original sales price. If the home has had some upgrades like using a synthetic brick material in the new accent wall in the living room or getting electrical panel upgrades, the appraisal value may improve.

Following the appraisal, the buyers’ agent asked the sellers to come down on the price, which they did by 2 percent. The buyers then agreed to come up 1 percent. The home sale could then move forward.

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