How Do I Know . . . ?
April 5, 2017
Closing Costs Part I
April 5, 2017

Oops, the Appraisal Came Back Low!

Once you have made an offer to purchase a house, the seller?s have accepted your offer and therefore you have a ?binding agreement?, the home will need to be appraised. Normally your mortgage company will arrange for the appraisal. Up to this time, the figures have probably been based upon comparable properties but there may not have been a professional appraisal done.

In most cases, the house will, at a minimum, appraise for the agreed upon purchase price. At times, however, the appraisal may not be as much as the agreement. And in this case, some decisions will need to be made.

Mortgage companies will not lend more money for the purchase of the home than the appraised value as determined by a licensed appraiser. While it is possible that the buyer could agree to purchase the house for more than the amount the house was determined to be worth by the appraiser, it is not very probable.

At this point, either the buyer or the seller can decide to opt out of the sale. But, if both parties decide to continue with the sale, the purchase price will need to be amended. Since all other issues have already been determined and are under a legal and binding contract, the purchase price is the only change that is made at this time.