If the appraisal on your home comes in under the agreed sales price, the buyer generally has to decide if they want to pay the difference in the sales price and appraisal price, or ask the seller if they are willing to sell the home for the appraised value or meet them in the middle. The buyers can also decide to cancel.
Depending on what type of loan the buyer is trying to obtain the appraisal could stick with home for up to 6 months. When an appraisal comes in low, it can be an issue because the lender will base your value on the LOWER of the sales price, or the appraisal value. So you have the following options:
Lower sales price to appraised value
Buyer pays the difference at closing
IF THE APPRAISAL VALUE IS UNJUSTIFIABLY LOW, and the lender is willing to review the appraisal, new comps and evidence that may increase the value based on the evidence presented.
So there you go. Buyer can pay the difference in cash, seller can reduce price, or if the lender has a system which allows it, you can dispute the appraised value with the lender and/or their appraiser. Every situation is different. If the buyer wants to the property and/or feels the appraisal is flawed, they may continue with the transaction. If there were multiple offers, their ability to negotiate a lower price with the seller is certainly diminished. If the property has had little activity when the offer was accepted, the buyer has more leverage. Every situation is different. If the buyer wants the property and/or feels the appraisal is flawed, they may continue with the transaction. If there were multiple offers, their ability to negotiate a lower price with the seller is certainly diminished. If the property has had little activity when the offer was accepted, the buyer has more leverage.
