Kristin's Blog: What happens when the home doesn't appraise in San Antonio, Texas?

What happens when the home doesn't appraise in San Antonio, Texas?

What happens when the home doesn't appraise in San Antonio, Texas?

You've heard the horror stories, right?  You are buying a home in San Antonio, you look and look and then find the perfect one! You make an offer, they accept, you are now under contract. After that you are moving right along thinking everything is GROOVY, you are so close to closing & then BAMMMMMMMMMMMMMMMMMMM! The appraisal comes in low. 

What do you do? 

Don't freak out! There are a few options in this scenario that can work out in your favor.  Working with your agent & lender can be beneficial. 

FIRST, review the appraisal with your agent.  Since you paid for it, it is your decision to release it to the selling agent or not.  If you decide to go this route, you can ask the seller to lower their purchase price to meet the appraised value given by the appraiser.  Let's say you are purchasing the home for $300,000 & the appraisal comes back at $295,000, there's a $5,000 difference.  If they don't agree to lower their price move on to the your second option.  In the case of an FHA loan, it is in the seller's best interest to lower their price since that appraisal will stay with the home.  Conventional appraisals don't.  

SECOND, ask the lender to contest the appraised value with the appraiser.  They can do this by providing more comparable homes to them.  Sometimes this helps, sometimes it doesn't.  The truth of the matter is, you can have three different appraisers appraise the home & get three different values. If the appraiser doesn't budge your last option is to.....

THIRD, pay the difference yourself.  This is painful, I know.  Most folks who end up in this situation feel stuck.  They have come this close, they expect to close in days & then they are thrown for a major LOOP!

Of course your agent is going to assist you in making the right decision in this case! Keep your fingers crossed & wait for the words, "IT APPRAISED!"

Kristin Moran

Specializing in San Antonio & surrounding cities
RE/MAX Access - Realtor®/Owner 210.313.7397

Buy a home from me, use the truck to move for free!



Comment balloon 30 commentsKristin Moran • March 12 2013 12:46PM


Great write up Kristin and terrific advice to buyers who are buying in San Antonio who have an appraisal come in low. Hopefully the seller will lower the price so all things can continue smoothly :)!  

Well deserved feature :)!

Posted by Brenda Mullen, Your San Antonio TX Real Estate Agent!! (RE/MAX Access) over 7 years ago

I agree with Brenda: hopefully they will lower the price.

But since we have such a low inventory in here( Valley, CA), most of counter offers require to remove the appraisal contingencies. The difference is not just 5k, but 50k up to 100k on the property in 300k range. What a strange time..

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Calabasas CA (Barcode Properties) over 7 years ago

And if it's an FHA appraisal, that value sits on the house for other FHA buyers, so the seller is better off lowering the price unless they want to wait for a conventional buyer to obtain a new appraisal.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - over 7 years ago

In this instance the seller did, Brenda! At the last minute! Phew


Wow, Inna! Sounds like a whole different world!

Donna - so very true! I should add that.  

Posted by Kristin Moran, San Antonio,TX - Real Estate - 210-313-7397 (Owner - RE/MAX Access - over 7 years ago

I recently ran into this. The appraisal came in $17K low on a $275K house. The listing agent contested it and the sellers stood firm on their price. The buyers decided to walk away. So it doesn't always work out for everyone.

Posted by Tammie White, Broker, Franklin TN Homes for Sale (Franklin Homes Realty LLC) over 7 years ago

If the agent did the comps and an offer was made based on those, the appraisal should come in ok. So far so good. But only in a market where prices are steady or going down. Prices are going up however so houses get sold more often than not for more than the comps.  I have noticed that buyers are more and more aware of the rising market and are ready to pay a little extra based on what this market is doing.

Posted by Les & Sarah Oswald, Broker, Realtor and Investor (Realty One Group) over 7 years ago

It goes to show how careful you have to be when pricing a home; how careful you have to be when crafting a buyer offer on a home and doing good comps. But one thing I'd never do is personally pay the difference. That's a slippery slide.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Realty) over 7 years ago

Hi TAmmie! - Nope, not always! Very frustrating indeed!

Sarah & Les - That's exactly what happened this week!

Nina - Very true.  In this case the home was definitely worth what the buyers paid, appraiser used older comps & different styles.  Odd all around!

Posted by Kristin Moran, San Antonio,TX - Real Estate - 210-313-7397 (Owner - RE/MAX Access - over 7 years ago

Great post thank you for sharing and it is always a good ideal to prove your point when listing a property..

Posted by Laura Filip, What can we do for you today? (Laura Filip Broker , Opening doors for All Seasons of Life ) over 7 years ago

Yes, you said it...BAM.  Just had it happen to me.  It sucks that the appraisal is the last thing to come before closing.  I would think that many buyers would not spend money on home inspections if they knew in advance that the house would not appraise.

Posted by Tamara Inzunza, Close-In Alexandria and Arlington Living (RE/MAX Executives) over 7 years ago

I have been so fortunate in that in over 15 years, I only have had 2 properties that did not appraise. 

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 7 years ago

It happens at times, and the language in this eventually is in our Sales Agreements and spells it out.  This is why I go over it with clients because it may happen and as your post points out, there are various scenarios to handle it.

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) over 7 years ago
Kristin, last year I saw couple of deals fell through because of the appraisal came in low.
Posted by Wika Hutchinson, Broker, CRIS, SFR, CDPE over 7 years ago

What about option four where we sit down with the seller and tell him that his listing agent is a fabulous salesman.  he is soooooo good that he has managed to find a buyer willing to pay more for the house than it is worth.  All the buyer has to do is have the $5000 extra in cash and he also has to sign a form that says he is certified stupid.  He is so stupid that he paid a real estate expert, Mr Appraiser $350 to tell him and the bank what the house is worth but since Mr. Sellers house is soooooo wonderful , Mr Buyer is ready willing and able to pay more than an expert says it is worth. The bank requires him to sigh the stupid form before they will lend him the money to buy it . for more than it is worth. Mr. Seller can wait for another stupid person and hope the appraiser will appraise it for the price that Mr seller wishes it was worth. Maybe the next appraiser will have an adjustment for sentimental value.  Maybe since our economy is about to sequester to a grinding halt, the next appraise willprobably apprase it for less.

Mr Seller you would be foolish to buy this house back for $295000 ( what an expert says it is worth) so maaaaybe you can sell it to a stupid buyer for $300 ,000 later.  You would be wise to sell it to this buyer for $295,000 and know that you did not leave one dollar lying on the table. 

Posted by Ron Climer (Keller Williams Realty Mountain Partners) over 7 years ago

Don't know about San Antonio, but here we have a 4th option and perhaps even a 5th, both of which I had to use for the first time in years last month. The 4th option would be to negotiate for the seller to pay a portion of the difference and the buyer to also pay a portion. Adding the 5th option would include both agents kicking in some too.  While I am not one who ordinarily discounts or rebates my commission, sometimes it's better to have a smaller percent of something than 100% of nothing and solidify a long-term relationship with a client who will become a source of future referrals,

Posted by Valerie M. Blake, Distinctive Marketing - Exceptional Service (RLAH Real Estate) over 7 years ago

I totally agree with comment #15 above. Sometimes, they can just split it.

Posted by Jill Sackler, LI South Shore Real Estate - Broker Associate (Charles Rutenberg Realty Inc. 516-575-7500) over 7 years ago


     Great write up!!  I just went through this exact situation.  In my situation there was a $5000 difference and what we did was my seller dropped $2500 and the Buyer agreed on his Seller paid concessions to go from $3000 to $500 which equaled the $5000 shortage in the appraised value.

     Everyone, believe it or not, is very Happy and we close on March 28th.



RE/MAX of Abilene

Posted by Kimi Bruno (ReMax of Abilene) over 7 years ago

Good advice.  We need to be careful when there is a bidding war among buyers that we do not over bid because this can cause am issue also.

Posted by Merline D Pennant - New homes, Short Sales and Pre-foreclosures, New City, New Towns, New homes (Regal Realty of the Treasure Coast LLC) over 7 years ago

Loved the suggestions you made and congrats on the little gold star. Big smile. I cant thank you enough for helping me the other day. I really am grateful.

Posted by Loreena and Michael Yeo, Real Estate Agents (3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co.) over 7 years ago

We recently had a low appraisal - $50K below.  The buyer ended up settling at $25K above the appraisal.  It helps to have other offers waiting, who will pay.  Also, low inventory here in So. California helps in raising those prices where all the comps are short sales. 

Posted by Michelle Drewry, Realtor - Signature Real Estate Group (Signature Real Estate Group ) over 7 years ago

Lots of informative and productive discussion here.  it's cool to see your options and the multiplication of options in the comments.  Thank you for starting the ball rolling. 

Posted by Judith Ritter, Rural Land & Homes Specialist (Dirt Road Real Estate) over 7 years ago

Kristin, you hit the three options on the head.  We see this all the time in our area, since prices are still coming down for the most part.

We always advise the seller to reduce the price because chances are the next appraisal will be the same or lower...

Posted by John Dotson, The experience to get you to the other side! (Preferred Properties of Highlands, Inc. - Highlands, NC) over 7 years ago

This is becoming a bigger issue everyday as home prices begin to escalate.  It always takes 6 months to a year for appraisals to catch up and we will see many cases of this in the next year or two.  There are always options.

Posted by Ric Mills, Integrity, Honesty, and Vast Real Estate Knowledge (Keller Williams Southern Az) over 7 years ago

I don't agree with Ron #14.  

There are differences between "appraised value" and "market value" in my opinion.  Appraised value always looks at historical closings generally negotiated at least 30 days back in history.  In stable markets, this tends to work.

Market value is what a willing buyer and seller agree a home is worth.  When the market was crashing some buyers felt they were getting great deals because the appraisal came in so much higher than what they were paying.  But if the value really WAS that much higher, why didn't the seller get the higher value?  Because the MARKET value was declining and the appraisal process really isn't well positioned to capture this problem.  My market declined about 50% from the peak and I'm sure that most buyers in 2008 and 2009 probably felt they were getting a deal and buying at less than appraisal....and many of them ended up in really bad deals....

In today's market (especially here in the Inland Empire of Southern California) we are having 'low' appraisals everywhere but many buyers are still EXCITED and HAPPY to finance based on the appraised value because they understand that the 'market value' is higher than appraisal and directionally seems to be heading up.

So what happens when a number of these buyers 'pay-the-difference' and the properties are ultimately sold?  New appraisal figures match what they paid!  Voila, the home is worth what they paid.  And in my current market my buyers are seeing even bigger price gains on the horizon.

And BTW, I think that suggestion #2 to rebut the appraisal is KEY.  I find mistakes in appraisals all the time and just recently was able to get an upward adjustment of 5% on an appraisal with a well written rebuttal.  

Posted by Michael J. O'Connor, Eastvale - 951-847-4883 (Diamond Ridge Realty) over 7 years ago

Laura - thanks for your comment.

Tamara - You know, that's not a bad idea!

Joan - those are very good odds!

Carla - Very true! I hope it's my only occurence for 2013!

Wika - I hate that!

Ron - thanks for your input! Looks like markets are different, without seeing all the facts it's hard to tell!

Victoria - very true.  Although I don't think that is something I would advertise.

Jill - thanks for the comment.

Kimi - Yippee! good for ya'll!

Merline - very true.  This is the case here as well!

Loreena - Anytime!

Michelle -  Wow! Big difference!

John - good advice!

Ric - very true.  Good to advice everyone up front as well!

Michael - Good points.  I do suggest we contest it.  I also agree with appraised value & market value differences.  Especially in a rising area & using like comps. 


Posted by Kristin Moran, San Antonio,TX - Real Estate - 210-313-7397 (Owner - RE/MAX Access - over 7 years ago

I agree that if the agent has done the job well when pricing the house should appraise. But I think it's tougher today because of the 3rd party involvement and their use of non-local appraisers. 

When I was an agent we were usually fine as long as they used a local appraiser. When an out-of-town appraiser was called in, all bets were off. They don't know the comps, they don't know local values, and they make a mess of things.

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) over 7 years ago

Hi Kristin. The last time that happen to one of my buyers, it was my buyer that made the decision to pay for the difference. We all felt that the appraiser came in to low for that community since values had been steadily rising in that neighborhood.

Posted by Jerry Newman, Texas REALTOR, San Antonio Military Relocation (Brown Realty, 210-789-4216, over 7 years ago

So, what happens when the appraisal is higher than the selling price, does your client pay more, does the seller increase their selling price? If you were the listing agent and discovered this circumstance, what could you do for your client? Thank you for sharing your reply.

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) over 7 years ago

Kristen, I like your rational, systematic approach to solving a problem that's becoming common as prices increase more than appraisers can justify.  I think the listing agent and seller need to ask themselves if the home can be sold for a higher price with conventional financing.  If not, the appraiser is probably correct.  If it can be, do it.  Yes, it can be a tough call which is why the listing agent's market knowledge is vital.

Posted by Lloyd Binen, Silicon Valley Realtor since 1976; 408-373-4411 (Certified Realty Services) over 7 years ago

Hi Kristen, this is happening about 50% of our deals.  We suspect it will get worse as inventory tightens.

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) over 7 years ago

This blog does not allow anonymous comments