Appraise value vs selling price

[Jason Parker]

If a property appraises for less than the asking price, will a bank still loan the asking price?

Asking 220k.

Appraised 2 years ago at 208k.

Great credit.

Fha loan.

4 unit primary residence.

[Jonathan Bombaci]

Banks will only loan up to the appraised value. In my market right now we’re having bidding wars on properties and the appraised value can become an issue in these scenarios. For example say a house is listed for $400k but they get multiple offers and accept a offer for $450k. If the appraiser says the property is only worth $425k then the bank will only lend up to that amount. So the buyer can either come up with an additional $25k to cover the difference or the seller can reduce the price. Most of the time, in these scenarios, they tend to meet in the middle. 

That being said just because your property appraised at $208k 2 years ago does not mean it won’t appraise for more today.