Profile picture for user774794

does the seller have to lower the sale amount when an appraisal comes in less than the asking price?

  • June 14 2013 - Southwest Colorado Springs
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Answers (2)

Profile picture for David Widlund
You have the option as the buyer to cancel the contract without losing your earnest money if the appraisal fails to meet the purchase price. For the lenders purpose, the loan terms can change if the appraisal is less than the purchase price, and in many cases, the buyer must pay the difference between the purchase price and the appraised value in cash to retain the loan terms. If you are the buyer, you must decide whether to pay the difference in cash or assume the value is fair regardless of the appraised value. In the current real estate market, offers are typically much higher than 6-12 months ago, so appraisals by their nature, are coming in lower than purchase price fairly often. If you're getting a loan, consult with your lender and agent to determine your best course of action.
  • June 14 2013
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Profile picture for wetdawgs
No, the seller does not have to lower the sale price if an appraisal is lower. There are many options, some of which are listed below:

Seller lowers price to appraisal price.

The buyer cancels the contract.

Seller and buyer negotiate and meet somewhere in the middle, with the buyer paying the difference out of pocket (this is not part of the down payment considered by the lender).

Good luck.
 
  • June 14 2013
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