When you’re buying or selling a home, the appraisal is a pivotal moment in the process. In an ideal world, the appraised value matches or exceeds the agreed-upon sale price. But what happens when it comes in low?
At Victoria New Homes Group, we understand how frustrating and stressful a low appraisal can be, especially in Victoria’s competitive real estate market. The good news? You have options.
Here’s how to navigate a low appraisal and keep your real estate deal moving forward.
What Is a Home Appraisal?
A home appraisal is an unbiased estimate of a property’s market value conducted by a licensed appraiser. Lenders use this number to ensure they’re not lending more than a home is worth. If the appraisal comes in lower than the purchase price, it can delay or derail financing unless the gap is resolved.
Why Appraisals Come in Low in Victoria
Victoria’s real estate market is dynamic and fast-paced. Sometimes appraisals lag behind market trends due to:
- Recent comparable sales (comps) not reflecting rising prices
- Unique property features not adequately valued
- Appraisers unfamiliar with specific neighbourhoods
- Changes in market conditions after the offer was made
Steps to Take After a Low Appraisal
1. Review the Appraisal Report Carefully
Start by requesting a copy of the report and reviewing it with your REALTOR®. Look for:
- Incorrect property details (square footage, number of bedrooms, upgrades)
- Inappropriate or outdated comparables
- Omissions that may have impacted the valuation
If errors are found, your agent can request a reconsideration of the value.
2. Dispute the Appraisal
If you and your REALTOR® believe the appraisal is inaccurate, your lender can submit a formal dispute. This involves:
- Providing additional comparables
- Highlighting unique features or recent upgrades
- Pointing out errors in the report
Disputes don’t always result in a new value, but they’re worth pursuing when justified.
3. Renegotiate the Purchase Price
In some cases, the buyer and seller may agree to lower the purchase price to meet the appraised value. This depends on how motivated both parties are and the competitiveness of the market.
4. Bridge the Gap with a Larger Down Payment
If the buyer wants to keep the original price but the lender won’t cover the full amount, the buyer may need to increase their down payment to cover the difference between the appraisal and the purchase price.
5. Consider a Second Appraisal
A second opinion may be an option, especially if the first appraisal was unusually low or flawed. Your lender must agree to this approach, and you’ll usually need to cover the cost.
6. Walk Away (as a Last Resort)
If no solution is found and the financing can’t be secured, either party may decide to walk away, especially if the offer was conditional on financing or appraisal results.
How We Can Help
At Victoria New Homes Group, our local expertise and negotiation skills can make a big difference when dealing with a low appraisal. Whether you’re buying a new build in Langford or selling a heritage home in Fairfield, we help you:
- Understand your options clearly
- Communicate with appraisers and lenders
- Strategize on renegotiation or financing solutions
- Maintain momentum in your transaction
Final Thoughts
A low appraisal doesn’t have to mean the end of your home-buying or selling journey. With the right approach and professional support, you can overcome the challenge and move forward with confidence.
If you’re facing appraisal issues or need real estate advice in Victoria, BC, contact Victoria New Homes Group today. We’re here to help you every step of the way.
