It happens more than you think! I was involved in a transaction that came back from the bank with a low appraisal. My first thought was the banks appraiser did not know what he was doing with comparative listing prices. Some appraisers just do not know our market values. They go by the MLS solds or they are coming from an area far from where we buy/sell.
Here are 3 steps to help you handle a bad appraisal:
Try to get the appraisal adjusted. It’s very difficult to get the appraisal changed. The new appraiser can see what the old appraisal was for and they rarely change it. You have to do your own homework as the listing agent to support your findings as to why you priced it as such. The lender can send out a different appraiser and although can be costly I support this idea.
Apply for a loan with another lender. Have the buyer apply for a loan with a different lender. This may be the best way to have the property reappraised and produce a favorable outcome.
Have the clients agree to a new price. If you are representing the buyer, you may want to try and get the price renegotiated. If you are representing the seller, the goal is to get the buyer to make a higher down payment because the lender is only concerned with the amount of the loan and not the total price of the property.
It’s a frustrating process but as the seller representing the buyer we got our number.