What happens if the appraisal comes in less than the contract price? I dealt with this twice this past week. In both circumstances I was representing the buyer with the appraisal coming in under by several thousand dollars. So what are the buyers options? Per the contract the property must meet all the lender requirements including the appraised value. If it doesn’t one of four things happens:
1) The buyer terminates the contract and requests their earnest money back
2) The buyer makes up the full difference & file proceeds to close
3) The seller lowers the price to the appraised amount & the file proceeds to close
4) The buyer makes up a portion of the difference and the seller lowers the price some & the file proceeds to close.
In my experience most times the buyer and seller will choose option #4, come to a compromise and not let the deal die. #appraisal #financingaddendum