If you are buying a home in Lake Tahoe, you are probably familiar with the loan approval and appraisal process. They tend to go hand in hand and if your appraisal doesn’t come back at the contract price, the loan options can change. Worry not for we have some tips on how to get over this speed bump and sail into closing!
First thing you can do is dispute. In the event that your appraisal comes back short, you can work together with your Lake Tahoe Real Estate Agent as well as your lender to establish whether or not the appraiser included all the relevant comparable sales. Your lender will typically consult with your agent and then give their professional opinion on whether or not it is advisable to dispute the value. If so, the lender will present a case for dispute to the bank’s appraisal department. From here, one of two things can happen: The value is revised to match your contract price and everything continues on OR the value is selected as being appropriate for the property. If this happens, you and your real estate agent can ask the seller for a reduction in property price. If they refuse, you have some more options. Also, keep in mind that due to federal regulations, this process is not usually quick so you might need to get an extension on your contract.
If the seller refuses to lower the price on the Lake Tahoe home for sale, you can bridge the gap by offering more of a down payment. You will need to decide if you can afford to do this and the lender will have to decide if you have the reserves left over to still qualify for the loan. On the plus side, the monthly payment will be lower when you make the bigger down payment. If putting more money down isn’t a possibility, you aren’t out of options. You can keep your down payment the same and get mortgage insurance.
In any real estate transaction, it is very important to work with a qualified Lake Tahoe real estate agent. Part of their job is not only guiding you through the process, but also helping you trouble shoot when things don’t go according to plan-such as the appraisal coming back short. For more information, call our office at 530-543-6676.