Randolph Kinney's Q&A

Contracts to purchase a short sale property are contigent on the bank's approval to agree with the terms, conditions and price of the offer.  That is the bank that is holding the current first mortgage and any additional lien holders on the property that will be affected.The new lender for the buyer and the old lender for the seller are interested in current "market value".  The purpose of the appraisal will be to determine market value for a mortgage finance transaction.  Market value is defined by Fannie Mae.The the most recent, most proximate, most similar properties are the comparable properties that will be used to determine market value, after adjustments.If the bank who holds the mortgage agreed to your terms, conditions and price before the appraisal, they are duty bound to support that.Your lender may not agree with the opinion of value expressed by the appraisal they ordered.  They may find fault with it and order a new appraisal or they could just cut the value they will loan on.