NEWBIE Investors, Appraisal came in low? What to Do?

[Shardina R.]

I don't know what to do? Need some advice?

Oh, and Closing cost of the table.

[Charlie MacPherson]

@Shardina R. More information would be helpful.

What kind of financing and how much down payment? If it's FHA (and check on it, but I think also true for USDA and VA), it has to appraise for the total purchase price, not the amount financed.  Conventional appraisal is tied to the financed amount, so a larger down payment might solve it.

Is the appraisal right?  What did your comps say?  If the appraisal was wrong, you can:

a) If a VA loan, trigger the Tidewater clause by notifying the appraiser that you're challenging his appraisal amount. All parties have 72 hours to submit data to the appraiser to challenge. Bring your comps to show him how he's wrong - and be conservative. Stretching the truth will get you disregarded.

b) Any other type of loan, talk with the lender and challenge with your comps and/or pay for another appraisal. 

On the other hand, if the appraisal was right, by definition, you're overpaying for that property.  In that case, you can use the appraisal to negotiate the purchase price down. 

If you had a financing contingency in your offer, a failed appraisal means that you can't get financing, so you can - and probably should - get out of the deal.