Having an appraisal come in low can be upsetting to both the buyer and seller. Considering the impact a low appraisal can have on the home buying and selling process, it's important to educate yourself on what factors typically lead to a low appraisal.
Your home may have an incredibly finished basement, but the appraiser will still have to calculate the value of the basement differently than the square footage above ground. This is, in fact, one of the more common reasons why an appraisal comes in low. Valuing a basement can often be far more subjective, especially when there are extravagant features such as a home theater, custom bar, or a personal gym. While a nice finished basement can substantially upgrade the square footage and features of a home, the value of the basement space will still only be worth a fraction of what similar space upstairs would be.
Every day there are thousands of properties that have price reductions, and it only means one thing: the home was not priced appropriately. The seller was overzealous, or perhaps the agent promised the moon in hopes to make a sale. In states where dual agency exists, a buyer will occasionally go directly to the listing agent. They don’t have a buyer’s agent in their corner guiding them, and they end up significantly overpaying for the property. When purchasing a home, it always makes sense to have a buyer’s agent representing your best interests. Don’t be conned by dual agency.
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