When your buyers are securing a mortgage, they'll need to enlist the services of a home appraiser.
Similar to the home inspector, but with a different mission. Instead of scrutinizing your property for issues and repairs, the appraiser's task is to gauge the value of your home.
To achieve this, the appraiser not only conducts a comprehensive examination of your property but also assesses the sale prices of comparable houses in your vicinity, similar to what a real estate agent would do for you. If the appraiser's valuation aligns with the purchase price your buyers are offering or even surpasses it, all is well.
However, if the appraisal comes back with a value lower than the asking price, it could pose a challenge. Lenders generally won't finance an amount exceeding the appraised value. In this situation, your buyers have two options: either cover the difference with cash or negotiate a lower sale price with you. As the seller, you also face a decision: accept the reduced home price or consider other options.
In making your choice, it's essential to consider the market conditions and how easily you could find a new buyer. If you have a surplus of offers, moving on might be the best option. However, keep in mind that you could encounter the same appraisal issue with subsequent buyers. Unless you're confident that your home's value is higher and you're ready to start the selling process from scratch, it might be more advantageous to make concessions and keep the transaction moving forward.