appraisal 5k under contract price - advice?

[Mike Krieg]

ok, I have a duplex under contract in new braunfels, tx...great area, growing...leased currently at $2650, contract price is 295k...appraisal came back at 290k....thoughts? I have earnest money of $2800 down on the deal...if it appears I may be able to get that back, I may play hard ball and see if the seller will lower the price to the appraisal. however, if I decide to take the 5k to closing, it impacts my ROI, but not significant in the grand scheme of things. This duplex is in line with my goals as it gets me a salaried, more responsible tenant, less management burden, and a return of 14% on cash invested. IRR would be around 17%, maybe 18%. any ideas on how to deal with this lower appraisal would be much appreciated. thank you.

[Charlie Fitzgerald]

Ask them to drop to the appraised value.  If they don't, tell them how sorry you are that they are going to have to start all over again with looking for a new buyer, knowing that the property will not appraise for what they are asking for.  Then don't say another word....if they do not drop...and you really want the place, ask them to meet you in the middle and drop $2500.  I am betting you will not have to do that if you do not cave in when you ask them to drop.