If the appraisal value of a house is higher than the agreed-upon purchase price, it may feel like you lucked out. However, there are still a few things to keep in mind. Here’s what happens if the appraisal is higher than the offer:
Your down payment will remain the same. The lender will only loan you the amount that was agreed upon in the purchase agreement, so you can’t borrow more money to make up the difference.
The seller may want to renegotiate. In some situations, the seller might think they could get more money for the house and opt to cancel the deal to try and sell it to someone else.
You might have to pay more out of pocket. If the seller agrees to stick with the original purchase price, you may need to cover closing costs and other fees out of pocket if your loan won’t cover them.
The appraisal could be incorrect. It’s possible the appraisal is not accurate and was overestimated. If this is the case, you can hire your own appraiser to double-check.
In summary, if the appraisal is higher than the offer, it’s not automatically a bad thing. Just remember that the amount you can borrow won’t change, and there could be other factors to consider. It’s always best to discuss any concerns with your real estate agent or lender.