Stafford, TX · Member since 2014 · 6 posts · 2 votes
A home being sold for 330K was only appraised for 309K by the bank. Should the buyer ask the seller to appraised value by the bank? If buyer walks away does he lose his earnest money?
thanks for replies. I should have mentioned this is not a investor home and it's being financed by buyer putting down 20% of sale price.
Then I would point out to the seller the low appraisal and get them to reduce the price...unless your buyer doesn't mind putting up the 20%, plus the $30k difference in cash for a house that they are starting out with underwater.
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
12y
@Ashish Mehta Yes to the idea of getting the price reduced (see @Ophelia Nicholson )...and maybe to the EMD returned. If you were coming in as a cash buyer, then no. If you were coming in as a financed buyer, then yes since the appraisal being low prevents you from getting financing.
If you were buying this to cash flow (although I don't see how with that high of a purchase price), you could still just buy it if you can come up with the cash difference and the cash flow recovered your cash in (in this case $21k) quickly.
thanks for replies. I should have mentioned this is not a investor home and it's being financed by buyer putting down 20% of sale price.
Then I would point out to the seller the low appraisal and get them to reduce the price...unless your buyer doesn't mind putting up the 20%, plus the $30k difference in cash for a house that they are starting out with underwater.
Involved In Real Estate · Hyattsville , MD · Member since 2011 · 298 posts · 256 votes
12y
@Ashish Mehta The fact that the buyer is putting down 20% doesn't change the answer. The loan goes by whichever is the lower of the sales price or the appraisal. If the appraisal is lower then the lenders loan will be based off 309k not 330. That means if the buyer wants to pay 330k they will have to come up with 21k plus 20% of 309k.
So the answer is to send the appraisal and addendum to the seller asking for a price reduction to 309k.