Closing a Sacramento Home in Elmhurst With a Low Appraisal

A Sacramento Realtor can negotiate a solution for a home in Elmhurst with a low appraisal.

In the overall scheme of things, it doesn’t always make a lot of sense to fret about the possibility of a low appraisal in Sacramento. Worrying about that is like worrying about rain. If it’s gonna happen, it’s gonna happen and there ain’t one darn thing we can do to prevent it, regardless how an agent thinks. An agent mentioned the other day that we agents always know how a home will appraise, and the thing is we do NOT always know. There is no way because we are not inside the appraiser’s head. An appraisal is just one person’s opinion.

This is not to say it’s not possible to contest an appraisal because I’ve certainly been successful at challenging them. The problem that comes into play is when you can’t argue with the comps used. I spent a long time studying the comps for the home in Elmhurst with a low appraisal, and I could not find a way to disagree. I turned those things inside out and tried a dozen different options.  I had informed the seller when we listed the home it was possible it might not appraise but is it better to try and fail than not to try at all? See, I think it’s better to try. If the seller agrees, we do it.

When the seller initially called me, I was on my winter wor-cation in Hawaii. We could have put his home on the market in December, but he wanted to wait until I got back from our Christmas trip to Cuba in January. He was surprised that I remembered him because he was one of the last buyers I ever solely represented many years ago before switching my practice to focusing on sellers. I recalled his reluctance to buy the home in Elmhurst at first, how we looked at many others that didn’t hold a candle to this home or its location. I had insisted we go back and suggested he and his wife sit in the living room to imagine they owned this home and had just come home from work at night.

We went on the market in January and almost immediately received a slew of offers from very excited home buyers. Our inventory is still low in Sacramento. Never did it cross our minds that this could turn into a home in Elmhurst with a low appraisal. The last comps reflected an upward trend and the median, including the average square foot price, was exactly our sales price. Buyers were offering list price. Yet, the appraisal came in $25,000 low.

That’s a lot of money. The seller was frantic and sent me comps from September of 2015, which were too old to use. Consumers don’t realize we can’t go back further than 3 months. I talked with the buyer’s agent and suggested the buyers take the additional down payment money they would now have leftover due to the difference in the down payment for the lower sales price and give it to the sellers. After all, it was money they had planned on spending anyway. There was also nothing else to buy in Elmhurst. The buyers agreed.

However, that was not enough to appease the sellers. They wanted more. The problem was the buyer’s lender would not allow, for some odd reason, a cash contribution, even though the down payment was 20%. The lender insisted the buyers “purchase the appliances,” and we were not comfortable with that approach. Instead, we asked the buyers to pay off the seller’s SMUD loan, which was closer to half of that appraisal difference and twice the buyer’s original offer. The buyers agreed and it closed. There is more than one way to sell a home in Elmhurst with a low appraisal.

Would a discount agent have negotiated that 5-figure additional payoff for the seller?

See Getting More Money Out of a Low Appraisal in West Sacramento.