What I think the situation is, is that you can't close unless something is adjusted. Your bank will refuse the loan since the home doesn't appraise. So something needs to give unless you want to walk away (you can - your contract will have a thing in it called appraisal contingency for your financing.
But if everyone wants this to happen then a mixture of stuff can occur. You can kick in more, The seller can come down - the agents can reduce their commissions (I highly recommend leveraging this - they won't want to "lose this deal" and will be more disposed to adjusting now or losing everything).
Since the market out there may well still be falling, this can be very good leverage for you to get the seller to drop their drawers another $10K - or you will WALK. If you want to play hard ball, it's a good time for it.
But ... your question appears rhetorical at the moment ... so wait and see ...!!! Good luck!
Your Realtor should be the first person you go to with a question about your executed contract. It is their job to protect your interest while educating you in the home buying process.
That being said.... If you did not waive the appraisal contingency in the Residential Purchase Agreement,...then you have several choices...
1) Ask the seller to adjust the purchase price to meet the appraisal price ( this is always my first recommendation when representing a buyer).
2) Renegotiate the purchase price with the seller and come up with a number that works for all parties
3) Kick in the money to make up the difference...This is when you have to ask yourself,...What are my goals for this property and what is it worth to me right here and now..?
Good luck with your deal.......I hope this helps
Hank Lauzon III
Signature Real Estate Group
9525 Hillwood Drive #120
Las Vegas, NV 89134
Web : http://www.HanksLVRealestate.com
Never look down on anybody...unless you're helping them up.
The standard GLVAR purchase agreement does address this issue. This is what it says.
If the appraisal is less than the purchase price, the transaction will go forward if (1) Buyer, at Buyers option, elects to pay the difference and purchase the property for purchase price, or (2) Seller, at Sellers option, elects to adjust the purchase price accordingly, such that the purchase price is equal to the appraisal. If neither option (1) or (2) is elected, and the parties cannot renegotiate, then either party may cancel this agreement upon written notice, in which event the Earnest money deposit shall be returned to the buyer.
Typically the seller (even the Banks) have been lowering the purchase price to match whatever the property appraises for.