If you are putting 20% down then you could still finance the same amount, however it would be subject to PMI now. Rather than asking the builder to reduce the price altogether you could ask them to pay your PMI for two years (in terms of seller concessions or covering some closing costs) and then you could get it re-appraised in a couple years and drop the PMI then

If the new home you are in contract to buy appraises for less than what your contracted sales price is you most likely have the option of cancelling the contract or paying the price over the appraised value. The seller/builder may be willing to re-negotiate the sales price downward to the appraised value.

Typically what happens is the buyer and seller adjust the value to the market value. If the builder/seller is wise they know that if they let you go they will have the same problem with the next buyer.

So you, as the buyer, are in the best position. Just hang tough and it will pay off for you.

Good luck,
Mike Walters

Listen to Bryce, lower the price.

Problem is with any purchase that appriases for less than the purchase price is that buyers cannot get financing unless they come up with the difference. Builders and sellers alike then in most cases will lower the price to the appriased value. You can prtect your self by adding a clause in yourpurchase aggreement, " subject to property appriasal" the if the home does not appriase you should get your deposit back. Most state real estate contracts have this clause anyway..

http://www.fhamortgagefhaloan.com/

Find out what the builder is going to do. Are the discussing this with you? They may have to lower their price.

Best,

Rosie

You do have options some of which depend on whether you are getting an Conventional or FHA or V/A loan.
If conventional the Appraiser is selected under HVCC guidelines and there is virtually nothing you can do will change the results.
If FHA or V/A, you or your Lender select the appraiser and are able to have it reviewed and modified if you can show that the information used was incorrect.
If neither of these works you are left with 2 choices:
1. Get the Builder to lower the price.
Or
2. Put up the extra cash.
Be sure to check your purchase contract to see if the appraisal coming in for value was a contingency of the loan and you are therefore free to cancel the contract and get your deposit back.
You should also give some thought to the appraisal being correct and you are actually trying to pay more than it's worth in today's market.
Good luck, Bill

Bottom line is the bank will lend based on appraised loan to value. You cannot loan for more than the house appraises for. The builder won't be happy about it, but he'll have to lower his price to appraised value if he/she want's to sell it.