There is a reason why homeowners sometimes fear home appraisers, particularly during a divorce, and that is because home divorce appraisals can come in lower than homeowners expect. In situations where a home divorce appraisal is part of a home sale, a lower than anticipated home divorce appraisal can potentially kill a deal. Even when there are no plans to sell the home, and one of the homeowners chooses to stay for purposes of keeping children settled in their same school, for example, a low home divorce appraisal can wreak havoc on the financial calculations made during negotiation of a divorce settlement.
Even if your home divorce appraisal comes in lower than you expected or, in some circumstances, especially during a strong housing market, is lower than the agreed upon sale price of the home, you can still recover. Here are four ways to regroup after a low home divorce appraisal.
Appeal. Even if you prepared for your home divorce appraisal thoroughly by presenting your home divorce appraiser with all of the information you had about your home, including improvements and information about the home which may not have been readily available or visible to your home divorce appraiser, you could still appeal the home divorce appraisal after completion.
Get a second opinion. Not all divorce appraisers have the same knowledge or experience. Some home appraisers are specialists in certain areas while others are not. Just as you would ask for a second opinion from a doctor before electing for open heart surgery, so, too, can you hire a second, or even third, appraiser to evaluate your home.
If you are going through a divorce, many homeowners fail to realize that it is advantageous to hire a home appraiser who is familiar with divorce issues. A home divorce appraiser will recognize and appreciate that your home divorce appraisal also gets used for purposes other than the sale of your home, including the calculation of your divorce settlement. He or she will understand the timeline of a divorce and how every delay can potentially cost divorcing homeowners money while causing unnecessary stress.
Negotiate. Especially during a housing boom where multiple bidders bid on the same property, causing a sale at or above the asking price, a home divorce appraisal may come in lower than the sale price. Since mortgage lenders want to ensure that, in the event a borrower defaults on his or her loan, that the mortgage company will be able to recover the amount of their loan, a mortgage company may be hesitant to underwrite a mortgage where the sale price is higher than the appraisal. Receiving a home divorce appraisal that is lower than a home’s sale price is often the quickest way to kill a deal. To save a deal, the seller can negotiate with the buyer to make up the difference by adding money to the purchase price or meet somewhere in the middle by contributing money as well.
Lower the home’s sale price. If a home divorce appraisal comes in low and a seller is unwilling to add money to the purchase price, a seller has the option to lower the home’s sale price so that it is in line with the home divorce appraisal. That way the buyer’s mortgage application is more likely to be approved and the home’s sale concluded. Though the seller might believe he or she is leaving money on the table, especially when a divorce is pending, the longer it takes to sell the marital home, the longer it can take to conclude the divorce proceedings, which can potentially cost the homeowners more money in the long run.
The important thing to remember about your home divorce appraisal is that it is not the final word. A home divorce appraisal is, in essence, a guideline for ensuring that a home is valued correctly, regardless if the home is going to be sold or not. If your home divorce appraisal is not to your satisfaction, remember, interpretation is subjective. That said, the best way to ensure accuracy is first to hire the most competent home divorce appraisal specialist for the job.
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