An appraisal gap does not always mean more money at the closing table.May 19, 2023
99% of people will agree with the following…if you purchase your new home for $500K and the appraisal comes back at $490K…you must bring that additional $10K to the closing table. Let me tell you...this is wrong!
Understanding this strategy will absolutely give you the knowledge to submit strong offers on your new home. As in, a significant part of your offer are your proposed terms for the potential appraisal value. And in this highly competitive market, home prices are increasing fast and home sellers want to be sure you can absorb the additional cost if the home does not appraise.
When submitting your offer, you will have 3 options in regard to the appraisal piece. You can waive the appraisal, quantify an appraisal gap or leave the contract as is. Of course, we can see which option will have the most leverage, but for most people, waiving an appraisal may not be an option. So, you should partner closely with your mortgage lender on how to strategically propose an appraisal shortfall and how it will impact on your bottom line.
Click my video to see clear mortgage scenarios so you can use this winning strategy on your new home purchase!
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