Profile picture for melissaleas

What happens if the appraisal is less than the offer, but not less than the loan value because of yo

I am a first time home buyer and found a home within my price for sale with a realtor.  At the time of inquiry I did not have a realtor and the seller's realtor said she would represent both me and the seller.  It's been ok until now and I think the house is going to appraise lower than our offer (350K).  We have 20K in a downpayment, which brings our loan price down to $310K.  What happens if the house appraises for $315K; above the loan price but below the offer price? Does the appraisal contingency still apply? Can we get our own realtor mid way through the process to help?

  • August 15 2012 - Staten Island
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Answers (3)

Your contract should allow you to either re-negotiate the price or cancel the deal all together if you have not removed your contingencies in regards to the appraisal.  I've had this happen and my buyer was able to renegotiate the price with no penalty...but the seller was also willing to accept the lower price.  The seller does not have to agree to this and could possibly be fine with you walking away.  The next buyer might not have this problem with the appraisal. 
  • August 15 2012
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Profile picture for sunnyview
If the house appraises lower than your offer not including your down, then you should be able to walk away or renegotiate. That means if your total offer is 350K and the house appraises for 340K, you should be able to cancel under most contracts.

Read your contract and once the appraisal is in, do not feel pressured by your dual agent to do what benefits the seller. I would ask other agents and people on Zillow their opinion before you just act on your dual agents advice. Primarily, the dual agent wants to close the sale and honestly  that may not be what is best for you if the appraisal comes in low.
  • August 15 2012
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Profile picture for wetdawgs
Last I checked, $350 - $20 = $330.

The appraisal contingency is on the whole offer, not the loan amount.
  • August 15 2012
  • 2Yes

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