Home / Sell / Appraisal & Financing
After the option period: appraisal and financing.
I’m Eddie Weir, Houston REALTOR® with REMAX in Greater Houston. Once the option period closes, the seller’s deal is no longer at full risk — the buyer’s general termination right is gone — but two things still need to land cleanly: the bank-ordered appraisal and the buyer’s final loan approval. Here’s what happens during those 15 to 21 days, where deals actually fall apart, and how I keep yours from being one of them.
Why This Phase Matters For The Seller
The Option Period Is Closed. The Deal Isn’t Done.
Houston sellers exhale once the option period closes — and they should. The buyer’s general termination right is gone, the inspection-driven repair negotiation is over, and the contract is locked in. But two contractual outs remain on the buyer’s side: the appraisal contingency (if the home appraises significantly below contract price) and the financing contingency (if the buyer’s loan doesn’t fund). Both run during the 15-to-21-day window between option-period close and closing day. Most Houston deals go through this stretch without incident. The ones that don’t, fail in predictable ways — and as your listing agent, my job is to spot the failure modes early.
Appraisal Contingency
The lender’s appraiser determines the property’s value for loan purposes. If the appraisal lands at or above contract price, the lender will fund the full loan amount. If it lands below, the buyer has the contractual right to renegotiate or terminate.
Financing Contingency
The buyer typically has 15–21 days from the contract’s effective date to obtain final loan approval. If the lender’s underwriting turns up a deal-killing issue (job loss, undisclosed debt, fraud flag), the buyer can terminate via the financing contingency and recover their earnest money.
Hidden Risks
Beyond the formal contingencies, two scenarios still kill Houston deals at this stage: title issues that surface during the title search (heir claims, unreleased liens, survey discrepancies), and lender underwriting curveballs where the loan officer didn’t catch something in pre-approval. I monitor both daily.
The Houston Seller’s Phase 4 Sequence
Five Steps. Three Weeks.
Once the option period closes, the timeline is mostly out of your hands as the seller — but every step has a checkpoint where I verify progress with the buyer’s agent and lender.
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01
Buyer’s lender orders the appraisal
Within a few days of option-period close, the buyer’s lender orders the appraisal from a licensed Texas appraiser. The appraiser contacts the listing agent (me) to schedule access — usually a 30 to 45 minute visit during normal business hours. I make sure the home is presentable and the appraiser has access to every room, the attic, and the garage.
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02
Appraisal report delivered
The appraiser delivers the report to the buyer’s lender, typically 7 to 14 days after the visit. The lender shares the result with the buyer’s agent, who notifies me. If the appraisal lands at or above contract price, we proceed to closing. If below, we move into gap negotiation.
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03
Loan moves through underwriting
While the appraisal is in flight, the buyer’s lender continues underwriting the loan: income, assets, credit, employment verification. Underwriters often request additional documents during this phase — this is normal and not a red flag unless the requests escalate to issues that affect approval. I stay in direct contact with the buyer’s lender to confirm progress.
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04
Title work completes
The Houston-area title company runs the title search, identifies any liens or encumbrances on the property, prepares the title commitment, and coordinates with the seller’s existing mortgage payoff (if applicable). Most Houston title issues are routine; occasional problems include heir claims on inherited property, undisclosed mechanic’s liens, and survey discrepancies. I track title progress and flag anything that surfaces.
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05
Clear to close
The lender issues “clear to close” once underwriting is complete and all conditions are satisfied. This is the green light. Once clear-to-close lands, the closing disclosure is finalized, the buyer wires their cash to close, and we set the closing day at the title company. From clear-to-close to closing day is typically 3 to 7 days.
Three Houston Appraisal Outcomes
What Happens When the Number Comes In
Three possible outcomes. As your Houston REALTOR®, I prepare you for each one before the appraisal is even ordered — so the moment the number lands, we already know the move.
Outcome 1 · Most Common
Appraisal at or above contract price
The appraiser values the home at or above the contract price. Lender will fund the full loan amount. No renegotiation needed. We proceed straight to closing.
This is the outcome on roughly 90–95% of Houston transactions where the home was reasonably priced and properly presented during the appraisal visit.
Outcome 2 · Manageable
Appraisal below contract price (small gap)
Appraisal comes in $5K–$15K below contract price. Three options to resolve:
(a) Buyer covers the gap in cash (most common when the buyer really wants the home and has reserves).
(b) Seller reduces the price to the appraised value (most common when the seller has competing interest or wants to avoid restarting the listing).
(c) Parties split the gap. As your listing agent, I negotiate to protect as much of the original contract price as the situation allows.
Outcome 3 · Rare But Real
Appraisal significantly below contract price
Appraisal comes in $20K+ below contract price. Larger gaps are harder to resolve and the buyer may legitimately walk via the appraisal contingency — recovering their earnest money in the process.
Options here narrow: meaningfully reduce the price, dispute the appraisal with the lender (sometimes successful with strong rebuttal comps), or accept that the buyer may terminate. We rarely get here on a properly priced Houston listing — but when we do, I have rebuttal options ready.
When the Appraisal is Wrong
Houston Appraisal Disputes — When They Work
Texas appraisers are licensed and regulated; they don’t get the number wrong on purpose. But appraisal is a judgment call, and judgment can be challenged. I dispute Houston appraisals when:
Wrong comparable sales used
The appraiser pulled comparable sales from a different submarket, condition tier, or square-footage band than the subject property. We submit better comps and ask for a reconsideration of value. Success rate: roughly 30–40% when our rebuttal comps are clearly stronger.
Material errors in the report
The appraiser miscounted bedrooms, missed a recent renovation, or misclassified the lot type. These factual errors get corrected via amendment. Success rate when caught: high.
Houston market velocity not reflected
If Houston comps the appraiser pulled are 3+ months old in a fast-moving submarket, more recent sales (closed AND pending) often justify a higher value. We submit the recent activity for reconsideration. Success rate: depends on how fast the submarket has moved.
Disputes usually take 5–10 days. We don’t dispute every low appraisal — only the ones where we have legitimate grounds. Frivolous disputes waste time and goodwill.
When Financing Falls Through
If the Buyer’s Loan Doesn’t Fund
Houston deals occasionally fail at the financing finish line. The buyer changes jobs, takes on new debt, has an underwriting issue surface late, or the lender simply can’t close on time. As your listing agent, my job is to give you accurate notice as soon as I see it coming and lay out your options if it happens.
Buyer terminates via the financing contingency
If the buyer can’t obtain final loan approval within the financing contingency window, they can terminate the contract and recover their earnest money. The seller keeps the option fee but the home goes back on the market. From the seller’s side, this typically costs 3–6 weeks of momentum.
Buyer asks for a closing extension
More common than termination. The lender is close to clear-to-close but needs another few days. We extend the closing date via amendment if it makes sense. Most Houston sellers grant 3–7 day extensions; longer extensions get harder to justify.
Loan switches lenders mid-stream
Rarely a good sign, but sometimes the right move if the original lender can’t perform. The buyer’s agent will request the extension; we evaluate whether the new lender’s timeline is realistic before agreeing.
Seller goes back on the market
If the deal can’t close, the home goes back on the Houston MLS as “back on market.” Backup offers from the original showing pool sometimes resurface; in other cases the listing needs a fresh push. I have a re-launch plan ready before any termination occurs — not after.
Houston Seller Phase 4 FAQ
Common Questions After the Option Period
Can the seller refuse to lower the price after a low appraisal?
Yes. The appraisal contingency gives the buyer the option to terminate or renegotiate, but doesn’t obligate the seller to anything. If the seller refuses to lower price and the buyer can’t or won’t bring the gap in cash, the buyer terminates and the deal ends. Strategy: refusing makes sense if the seller has reason to believe a different buyer at full price is possible (strong showing activity, multiple-offer history, fast-moving Houston ZIP). It’s risky if the listing has been on market a while.
How long does a Houston appraisal typically take?
Once the lender orders the appraisal, expect the appraiser to visit within 3–5 days. The full report is delivered to the lender 7 to 14 days after that visit. Some Houston-area appraisers are faster; complex properties (high-end, unusual, or rural) can take longer. Total appraisal turnaround: usually 10–18 days from contract effective date.
Should I be home for the appraisal?
No — better not to be. The appraiser does their work faster and more objectively without the seller present. As your listing agent, I’m typically present to provide access, share recent comparable sales, and answer factual questions about the home. Sellers waiting in the home tend to want to chat, which slows things down.
Can I ask the buyer to waive the appraisal contingency?
You can, in the original offer negotiation — not after the contract is executed. Some Houston buyers waive appraisal contingencies in competitive multiple-offer situations to strengthen their offer. If your buyer didn’t waive it, the contingency stays in force through the appraisal process.
What if title turns up an unexpected problem?
Most Houston title issues are minor (a release of lien that wasn’t recorded, a survey clarification needed, a name discrepancy on prior deeds). The title company resolves them as part of normal closing prep. Major title issues (heir claims, unreleased mortgages, fraud) can delay or kill closing. I track title progress weekly and flag anything that surfaces.
Can the seller back out during this phase?
No. Once the option period is closed and earnest money has been delivered, the seller is fully bound to the contract. The only contractual outs from this phase forward belong to the buyer (financing, appraisal). Sellers occasionally want to back out because a stronger backup offer appeared, or a personal situation changed — but doing so unilaterally exposes the seller to specific performance lawsuits and damages claims.
What if the buyer’s lender needs more time?
Lender delays are the most common reason for Houston closing pushbacks. If the buyer requests a closing extension because their lender needs more time, evaluate the situation: how close is clear-to-close, what specifically is holding it up, and how long is the extension. 3–5 day extensions for legitimate reasons are routine. 2-week extensions need stronger justification.
How do I know if the buyer’s loan is on track?
I stay in direct contact with the buyer’s agent and (with permission) the buyer’s lender during this phase. Weekly check-ins are standard; daily check-ins as we approach the closing date. If anything looks off — a missed milestone, a surprise underwriting condition, a slow document turnaround — I tell you the same day, not at the end of the week.
Clear to close. Now to closing day.
Once the lender issues clear-to-close, we set the final closing date with the title company. From here, you’ll review the closing disclosure, prepare to vacate (if you haven’t already), sign the seller’s documents, and receive your proceeds. Phase 5 is closing day from the seller’s side.
Protect the deal through closing.
One short call. If your Houston listing is in option-period close or heading there, I’ll walk through the appraisal and financing window with you so you know what to expect, what to watch for, and where the deal could wobble. Most Houston transactions close clean. The ones that do are the ones where the listing agent was paying attention.
