Financing in Dayton>Question Details

Ohio Realtor, Real Estate Pro in Dayton, OH

If appraisal comes in lower than the contracted purchase price, but HIGHER than the loan amount stated in contract, can buyer walk?

Asked by Ohio Realtor, Dayton, OH Tue Apr 27, 2010

Appraisal is lower than contracted purchase price, but higher than loan amount stated in contract (a 72% LTV). Lender states the buyer can bring funds out of pocket to make up the difference between the appraised value & purchase price--buyer already plans to put down high down payment that more than covers the difference. There is a contingency on financing in the contract, but nothing that addresses the appraisal. Can the loan be denied? If the lender would be able to make the loan, can the buyer ask to be denied based on appraised value? If loan can be given, buyer must fulfill the contract, correct? Contract states the purchse is based on the purchaser's ability to obtain financing of the stated amount. Does this make sense? Shouldn't buyer be legally bound to move forward with the loan and the purchase? State of Ohio.

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Pam Miller Howard’s answer
First -agree with the answer below. I am a REALTOR in Ohio with 27 years experience and I have taken the broker's courses but elected not to write the test. Although I have seen many situations, i STILL go to my broker if something comes up that is new or a situation that needs definition. They can go directly to the State to get answers from the State of Ohio legal department. But because you are from my city, i am assuming you are using a DABR contract and I very familiar with the contract language. Yeas ago I saw a flaw in the contract in just such a situation and went to the lawyer I use to write legal clauses for my contracts (we are REALTORS-NOT lawyers). I have a specific clause consisting of two sentences that goes in every contractIi write for a buyer to protect them in this case. The lender had NO right due to privacy issues to tell you what they did. This IS a situation where you need to go tot he broker. Now. You have the seller and are looking to protect their interests and get to closing. There is more than one solution to this problem.
0 votes Thank Flag Link Thu May 6, 2010
If you are an agent--ask your broker owner this question--
0 votes Thank Flag Link Tue Apr 27, 2010
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