Investment Offer value and appraisal

[Chelsea Allen]

If I make an offer which is contingent upon satisfactory appraisal and inspection, what happens if the appraisal value is lower than what I offered.?

Say I offer $100 and the appraisal says the property is worth $80, can I negotiate lower at that point? 

Thanks. 

[Michael Dumler]

@Chelsea Allen, there seems to be some confusion. The appraisal contingency protects your earnest money. It does not mean the seller must lower the price to meet the appraised value. Most sellers will agree to some price reduction or concessions in this market if the appraised value is low. However, in 2020/2021, this was unheard of. It depends on the market, the motivation of the seller, and how well-versed your agent's negotiating skills are. Overall, an appraisal coming in below the intended purchase price does not mean the seller has to reduce the contract price. If there is no agreement on price, you can terminate the deal without risking losing your earnest money respectively. Best of luck!