A low home appraisal can cost a home buyer money and much more!!!

A low home appraisal by a lender could kill a deal for a home buyer to purchase a home and cause the buyer to lose their due diligence.

A lender will only loan up to the amount of the appraisal. If the offer amount is for $300,000 and the appraisal comes in at $280,000, the buyer will need to come up with an additional $20,000 in cash to complete the transaction.

If they don’t have the additional cash, they could lose their due diligence and earnest money deposit (depending on the timing) if the seller won’t renegotiate.

That’s why it’s always important to do a thorough offer analysis of recently sold comparable homes before making an offer.