I would 1. Dispute the appraisal if you feel the property is indeed worth the value. 2. Have your agent present several recent closed comps (to the listing agent) to validate the appraisal and try to re-negotiate. I hope things work out in the end!
Forecast Realty, Inc.
CA DRE# 01338444
Keller Williams Realty
1) Have your Realtor try to negotiate a sale with the seller based on the appraisal price or some compromise thereof.
2) Have your agent review the appraisal, check for mistakes and perhaps ask for another appraisal from the lender.
if these don't work, you cancel. And alhtough it pretty much sucks, you can take comfort in knowing that you didn't over-pay for a home.
You now need to make a decision how badly you want the house, and how good the deal was that you struck on the house. If you think you are getting a good deal you may want to invest for a second appraisal, but beware this may not work on certain loans such as FHA where the first appraisal would have to be disputed, not just replaced. A good agent will work with the appraisal management company if there is a real flaw in what the appraiser did. But that is a crap shoot and many of these companies don't care about reason, they get paid either way.
The money you have invested so far is money well spent. If you were truly overpaying, you would have paid many times more extra over what you have now spent to find out if it was a good deal. If you still want the house there are several avenues a creative agent can take.
And don't blame the seller. They have their agenda just like you. And a lower price may not work with their needs of buying another home, or getting out of a bad mortgage whole, or a host of other reasons. Or they may just feel their home is worth the agreed upon price. That is their perogative.
Best of luck, and even though this is negotiating for your home, at this stage it is a business process that sometimes you have to kiss a few frogs to find your prince, and it may cost you some money.
Bummer to hear. Unfortunately, that's the way the cookie sometime crumbles. Has your agent gone back to the appraiser and asked them to re-evaluate the comparable sales? Has your agent looked at the comparable sales to determine if the sale price is justified? Then, you can have your agent present the comparable sales to the Seller to hopefully have them lower the price. You can also speak with your lender and contest the appraisal...but your agent will need to provide comps.
I always look at comparable sales and show them to my client before we write an offer to make sure that our offer is within the ball park.
Were there many items that need repair in the inspection report? You do an inspection to determine the condition of the house property so you know what your getting into. Sometimes, people pay for inspections, find out the property needs more work than you expected, then they cancel the escrow based upon findings.
Your other option is to increase your down payment to meet the price...cover the amount between the appraisal and the sale price in cash. However, it sounds like the property is overpriced and this option may not be your best bet.
All the best,
Kat Becker, Realtor
Prudential California Realty
Your Realtor should have explained the seller never has to come down in price. They agree to what's on the contract, nothing more, nothing less. If I ever think there might me a problem with value I have my clients wait to do a inspection until the appraisal comes in.