Appraisal

Another hurdle is the appraisal. A low appraisal can sink a deal on the spot. Ten years ago, low appraisals killed more deals than not, as the market was declining practically by the week. Now, thankfully, appraisals are much more reflective of the current state of the market as we have had a robust recovery, although there are cases where the agreed upon price is higher than the appraisers opinion or the current comparables. 

If you are paying cash, you won’t need an appraisal, but we strongly recommend an appraisal contingency in all cash offers. This will protect you and allow you to cancel the contract if the appraisal is low, and the seller will not lower the price to the appraised value. If you are financing the home, the home must appraise for at or higher than the sales price, or you must bring additional funds to the table to cover the difference (if your lender will even allow you to do so).