Home Buying in Lake Mary>Question Details

Joyce, Home Seller in Lake Mary, FL

if appraisal comes in lower than contract price, can buyer make up diff in cash under a VA loan?

Asked by Joyce, Lake Mary, FL Sat Jul 30, 2011

Help the community by answering this question:


It is in fact of life that appraisals are coming in conservatively at present times. So, is really up to the buyer if he wants to come out with the difference in cash. This can practice can be done under any kind of loan.

Best of Luck,

Maria Cipollone

Century 21 Tenace

2 votes Thank Flag Link Mon Nov 12, 2012
Yes, the buyer/veteran has the option to still purchase the home contract without regard to the amount of "reasonable value" established by the Veterans Administration. It is spelled out in the VA Amendatory Clause. The lender will only lend on the value though, so if the seller isn't willing to reduce the price to meet the appraised value you are correct in that the buyer will need to bring in funds for the difference.
1 vote Thank Flag Link Sat Jul 30, 2011
Mortgage Broker responds-

Depending on how the purchase is structured and the DTI (Debt To Income) ratios, a borrower may be able increase their rate for a LC (Lender Credit) which can then free up more money for the buyer to pay the difference OR to pay more closing costs, allowing the seller to reduce the sales price, etc., etc., etc.

Depending on the lending source, the Mortgage Lender or Broker may be able to restructure their compensation to help. However, the ridiculous VA 1% Total Origination Fee rule and the ABSURD and Crippling, Anti-Common Sense new rules in the Death Star (i.e. Dodd/Frank Act/ Borrower Paid or Lender Paid Comp. rules) are often deal killers these days for consumers, all thanks to Barney Frank, Maxine Waters and a few other Washington Space Cadets!

If the sales price is over $150,000 and if the Realtors are charging 6 points, ask them to cut their fee too or do Realtor Rebates.

If everyone contributes the deal may be able to fly.

0 votes Thank Flag Link Fri Aug 31, 2012
Joyce, ask your realtor how many VA loans they have personally originated, pre-approved, signed and funded. Once they have answered you they can write up the offer the way you want. After all, they work for you.

So yes, the buyer can make up the difference.
0 votes Thank Flag Link Sun Jul 31, 2011
Short answer ... yes they can make up the difference.

If the buyer truly believes the house is worth the purchase price, then they may want to consider challenging the appraisal. This can be done through the appraisal management company. If a good argument can be made on the adjustments or if additional supporting comparables can be found, then it is possible the appraisal can be changed.

Dan Lopez
RE/MAX Central Realty
0 votes Thank Flag Link Sun Jul 31, 2011
Joyce - you needn't worry about what your real estate agent is advising about regarding if the buyer can/can't do in regards to purchasing the home for more than the appraised value. Just tell them to write the darn contract! Have you read any of the advice that has been given to you in this thread?
0 votes Thank Flag Link Sat Jul 30, 2011
YES. VA allows for that situation. It is stated on the FHA / VA rider of the FAR/Bar contract.
0 votes Thank Flag Link Sat Jul 30, 2011
Joyce. Hopefully a VA loan broker will pick up this thread and give you an answer. I understand they can, but things are changing so fast in the lending business, 1/2 the people that do it every day are behind on information. As a Realtor I work hard to keep in tune with my side of the business.

Maybe you can talk to your Realtor, tell her your problems and suggest the two of you go talk to a VA lender that she knows for the information.

0 votes Thank Flag Link Sat Jul 30, 2011
I am the seller and listed my home for 225k and willing to sell it at 190k to the buyer. MY realtor is telling me that is it does not appraise at 190 for the buyer's VA loan then the buyer cannot buy my home even though he is more than willing the make up the difference up to 190K. We (seller and buyer) want to help each other but I feel MY realtor is not giving me good info for some reason.....she keeps saying that a VA loan does not allow the buyer to make up the difference if the appraisal is lower than the sale price. Is that true??? I can't talk to the buyer so I can't confirm. But the buyer's realtor keeps telling my realtor how badly they want it. Is my realtor being a blocker for some reason????? Are VA loan truly that strict??
0 votes Thank Flag Link Sat Jul 30, 2011
But as a Reator, I would advise buyer to walk, just because we can find a home at the correct price.
0 votes Thank Flag Link Sat Jul 30, 2011
Yes, the buyer can make up the difference if the seller is unwilling to lower the purchase price to match the appraisal.
0 votes Thank Flag Link Sat Jul 30, 2011
Hi Joyce

Yes, you can.

You have a couple of Options

1. You can ask the seller to reduce the price to the Appraised value.

2. The buyer brings in the cash.

Good luck.
0 votes Thank Flag Link Sat Jul 30, 2011
You could also lower your sales price, since the value isn't there.
0 votes Thank Flag Link Sat Jul 30, 2011
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