Appraisal Comes In Lower Than Sell Price

[Matthew Haralson]

Seeking some other opinions and/or advice on this situation.

I listed my home for 247,500. Within 48 hours, I had 6 offers. 5 of the 6 came in over asking. We went under contract at 251,000. The buyer is using a conventional loan and not asking for any closing costs. After inspection, a few minor things needed to be taken care of so we settled with the buyer at 249,500 as-is so that I would not need to mess with any repairs. Everybody is happy. Then the appraisal comes in at 240,000. The buyer initially says they will not pay above appraisal. Based on comps ran, both realtors involved in the deal did not think there would be an issue with the house appraising at contract price.

Another piece of information: The buyers father is the president of the bank that they are getting their loan through.

Could there be any sort of funny business going on with the bank getting an appraiser to low ball the appraisal to get the buyers a better deal?

How would you proceed? 

At this point now I told the buyer that I would RELUCTENTLY meet them in the middle at 244,750 so we each come out of pocket the same amount to make the deal go through. They said they would do 242,500 tops and that they can't afford anymore than that. 

Could they ask for a lower down payment percentage on the loan with the connection they have?

If I back out of the deal, what is the likelyhood of ending up back in the same exact situation on the next deal?

I would appreciate others opinions on this situation.

Thank you.