Appraisal came in under offer but well over loan- An issue?

[Shawn Thom]

I'm flipping a house that got caught up in a small bidding war.  Asking price was $246k, final accepted offer was $250k.  I figured appraisal can always be an issue so I chose some one that was putting $50k down leaving a conventional loan amount of approx $200k.  Appraisal came back at $240k.

Realtor forwarded us the appraisal and the mortgage broker's comments of "Appraisal came back $10k lower than offer.  let us know what you work out with seller".

Realtor seems confident that the $250k offer is good and says buyer is willing to move forward.  Does mortgage company have a dog in the hunt since loan is $40k lower than appraisal?  I've never heard of that being an issue.

Any ideas what the mortgage broker is referring to?

[Jon Holdman]

The appraiser's number may be just an opinion, but its an opinion that matters.

To stay with a purchase prices of $250K, appraisal of $240K and a 80% LTV loan the buyer will need to put down $58K instead of $50K. If the buyer's willing, this shouldn't be a problem. A $50K down payment gives a loan amount of $200K vs. a $240K "value" or 83.3%.