In fewer years, the Indian realty market is experiencing outstanding response from the potential buyers as well as the investors. One can easily get property in Bangalore, Delhi/NCR, Mumbai, Kolkata, Chennai and other Tier II cities, as builders are launching an array of residential and commercial projects on a regular basis, which are equipped with outstanding amenities. Along with that, several property owners are also selling their property, butthe home-selling process is a high-stakes process, which is full of thrill ride and exhilarating ups and scary downs. The evaluation of property can be a challenging moment for the home seller, particularly when the calculated property value is significantly lesser than the predicted value. Property appraisal is a delicate process that helps in assessing the estimated market value of the property. The value could be affected by the multiple factors like condition of property, dimension, recently sold comparable properties, safety parameters at the house and total age of the property. These factors might result in a higher appraised value of the property, or sometimes it might lead to lower appraised value too than the ask price.
Most of the times, the home buyers do not close as they feel cheated by the seller for quoting a higher price than the actual market value. This not only blemishes the reputation of the seller, but affects future prospects of getting a fair deal. Also, when the appraisal comes in below the agreed upon amount, the buyer might not be able to borrow the required amount to buy the home. So let’s have a look what can be done in such case.
Look for Alternatives/ Second Opinion
If in case, the first deal does not meet up with expectations, then the realty stalwarts suggest for the second appraisal procedure. This is extremely crucial when if similar properties in the same area are valued higher. According to experts, if the appraised value is worth lower than the contract price, then the seller should seek for opinion for next appraisal. The amount of evaluation process varies according to the location and the property dimensions.
Renegotiate the Price
If the estimated price is lower than the contractual purchased price, then the seller can renegotiate the asked price so that it should be in-lined with the appraised value of the home. Showcase the property values which are unique than the other nearby properties. It is recommended to provide extra benefits to the buyer so that it turn into a win-win situation for both the parties.
Review the Appraisal
Generally, the appraisal report is received within three weeks from the date of evaluation. It is always suggested for the seller to have a look at report carefully and find out the potential factors where the assessor might have missed while comparing the price. There could be an array of point which the assessor might skip such as the dimension of kitchen, bedroom or any other latest modifications that has been done recently. Highlighting such factors would increase the value of property and may lead to a profitable deal.
Communicate with Buyer
If the appraised value is on the lower side than the estimated cost, it is advised to talk with the prospective buyer and suggest to hire an assessor that could help in evaluating the deserved price of the property. In case, when the buyer needs a higher home loan from banks, all three parties including broker, seller and the buyer should come together to close the deal. Usually, financial institutions provides only 80 percent of the appraised value, therefore, if the appraisal is lower, the mortgage amount value decided the buyer will also reduce.
During finalizing the property value, when the appraised value is lower than the expected, then analyze what price will suit for both the parties without negotiating much. This can be achieved by a regular renegotiating with the potential buyer and if the current price justifies the market dynamics then it is a profitable deal. So, if you are awaiting long to close the deal, then fix a price that works for both the parties rather than scrapping the whole deal.