During our Once upon a time in Real Estate segment of our Santa Clarita real estate radio show, we gave three options that those have who are in escrow and when a home does not appraise for the price that was agreed upon.
When selling a home or real estate – there are typically two involved parties. The seller of the home and the buyer of the home.
While both parties are equal, in a way. The Buyer has more expense out of pocket in the form of cash in the starting of the escrow.
The two things that a real estate buyer won’t get back are the cost of the home inspection and the cost of the appraisal.
Those typically happen within a few days after escrow starts. Some of the “more savvy” realtors want the appraisal to happen first, especially in an unstable market.
The reason is because if the home, condo or townhome don’t appraise at the value and if the parties cannot resolve it in one of the three ways, then the buyer doesn’t have to expend the money to hire a home inspector. The deal is dead at that time.