Full-Offer Contract Signed, But Issue w/ Appraisal! Help!

[Vishesh Shah]

Hello,

I recently completed my first flip in Northern NJ. I bought the place for 125k, spent about 65k into it, with 10k more in miscellaneous & holding costs. I listed it for 289k and got multiple full offers the first day on the market. I went forward and signed a contract with a buyer through bank financing. Everything went well thus far, they did the home inspection and we agreed to do all the minor touchups and stuff on the report. They did an oil tank sweep and there was no tank residue or history, so that was a plus. Everything went well until yesterday 6/18 when we got the appraisal back. It came back at 270k, with another appraisal the bank got at 265k. Both these are severely low, as there are similar houses on the same street w/ no garage & that still needed work done for 265k. Also, we converted the attic to a 3rd bedroom, but both appraisals only list them as 2 bed (not sure what the FHA laws are regarding SFH and attic bedrooms.) We want to dispute the appraisal but want to know the best way to do so. Apparently, with bank financing, the seller's aren't allowed to bring their own appraisers. Could someone please advise who has experience in a situation like this? Thanks so much!