What You Need to Know When Dealing With Appraisals
“100% of the time, that conversation — no matter what — needs to happen upfront when you’re receiving the offer.”
- Dan Rochon
Episode Summary
Working as a real estate agent can be incredibly rewarding, but let’s be honest — it can also be frustrating when deals fall apart due to issues you could have prevented. One of the biggest culprits? Appraisals.
When you’re working with sellers, there’s one conversation you need to have every single time, even if you don’t anticipate a problem: setting expectations about the appraisal process.
Here’s why.
Be Present During the Appraisal
The appraiser will coordinate with you to access the property. Show up prepared.
Bring comparable sales (“comps”) with you. While appraisers are technically not supposed to use your comps directly, remember this: appraisers are human.
If you make their job easier by providing organized, relevant data, there’s a good chance they’ll consider it. They’ll still do their job, but you’ve influenced the process — ethically.
Prepare Sellers for Every Outcome
I always tell sellers there are four possible outcomes if the appraisal comes in low:
The buyer makes up the difference in cash.
The deal falls apart.
The seller lowers the price to match the appraisal.
Both parties meet in the middle and adjust the price together.
When you set this expectation upfront, there are no surprises later.
The worst thing you can do is wait until the appraisal comes in to have this discussion. At that point, emotions are running high, and deals are at risk of collapsing.
Challenging a Low Appraisal
Sometimes, an appraisal doesn’t reflect the true value of a property.
When that happens, you can challenge it.
You’ll need to provide three strong comparable sales and present a case for reconsideration. While it doesn’t always work, I’ve seen it succeed — sometimes it even comes down to relationships and professional communication with the appraiser.
If you ever find yourself stuck in this situation, reach out to me, and I’ll connect you with resources to navigate it successfully.
Why This Matters
Markets shift.
A year ago, we rarely saw appraisal issues, even when homes sold over asking price. Today, in certain pockets, appraisal concerns are more common.
By addressing the possibility of a low appraisal before the contract is even signed, you prevent unnecessary conflict and keep transactions on track.
Final Thoughts
Every real estate transaction has predictable challenges.
By being proactive and having tough conversations early, you can protect your clients, your reputation, and your paycheck.
Remember:
Be grateful.
Make good choices.
Help someone today.
And you just might find your next listing along the way.
