As early posts have suggested, they can challenge the appraisal. Yet, when dealing with seller's concessions you are inflating the price of the home (as you are asking the bank for more money). SInce the appraisal came back at 120K and your contract is $132,500 - that leaves your true purchase price at $125K.

The appraisal should shed some light on the comparables. Trying to get a 6% seller concession looks like it will be tough on the home. A couple of options would be to redo the terms of the existing contract, pay the difference of the appraisal and contract.

Good luck.

Nicole,

While you, as the buyer, paid for the appraisal, it actually belongs to the bank. The seller has a right to have his own appraisal performed, at his expense. His agent can question the appraisal and offer comparables but most likely the bank will ignore them. The seller's two year old appraisal has no bearing on your purchase. At this point, you can wait for the seller's appraisal then compare the two. You can renegotiate your offer or walk away from the deal as your mortgage is most likely contingent on the house appraising.

Nicole,

To answer your question, yes, they can challenge the appraisal. However, to challenge it based on a two year old appraisal is a very weak position.

From our position, to challenge your appraisal, they will need to pay for another appraisal that will be an accurate reflection of today's real estate market.

Good luck

I can't believe that the sellers agent actually thinks a two year old appraisal would be good today! I've had banks accept my comps but only if they were a few months old. Two years is ridiculous.

I doubt the bank would accept an appraisal paid for by the seller. The banks use only "bank approved appraisers. You can ask the bank for a second appraisal from another one of their bank approved appraisers paid for by the seller. Maybe the bank would go for it. Banks are getting very tight with prices now, considering they have been going down, not up. The sellers need to realize that any appraisal done two year ago is worthless. Those values are gone. You really don't want to over pay for a home, not in this market. I always tell my clients that if this home doesn't work out, there is a better one out there waiting for you. Best of luck.