Some areas realtors will say it does not matter. The houses sell above appraisal anyway.
Some good information was given below. However, in this current market I would not count on the Lender allowing the buyer to cover the difference in value. And I could not recommend to a client to consider that option in this current market either. There was a time 3 1/2 years ago at the height of the market that this practice was common. However, keep in mind that values were still trending upward at the time. I would recommend that you request for the seller lower the price to meet current value. Consult with your agent to help you with this process. Good luck!
Sometimes the seller will have the appraiser come back and make an adjustment for something they missed.
Time to negotiate (again).
The appraisal can also be challenged....I had to send the appraiser comps for my own house since it was unique when I was looking into refinancing.
The seller does not have to change the offer acceptance.
Often you put an amendment in the offer to cover these events.
Check with your agent. If they are worth it, they will work to get the deal closed.
Real Estate Agent / Realtor
Local Specialty: Victorville, Hesperia, Apple Valley
Exit Realty, Blaine Associates
16000 Apple Valley Road, Apple Valley, CA 92307
Put my Expertise to work for you.
Mei Ling Wang
A Member of the Council of Residential Specialists
AGIO Real Estate, Inc.
Cell # 760-475-0099
If you still have your appraisal contingency option, the simple answer is Negotiate. The seller does not have to drop the price and you dont have to increase. Now the issue is how bad do you want the property, how bad does the seller want to sell and what is your financial situation. A lender will use the lower of the purchase price or appraised value to determine their collateral position. If the appraisal comes in $20k lower than the purchase price the down paymentnmightnhave to be increased by about $20k to maintain the same loan to value ratios.