Appraisals are based on recent sold comparables. The builder should have known that it not would appraise and if they were watching the market then they would realized this. It must have been way over priced for them to be wanting to remove the incentives.

The problem is that many builders don't have professional Realtors who belong to the MLS working for them so they are not up on the latest statistics. I know in "The Lakes", in Menifee there is one model that is appraising very low because they simply built too many of a particular floor plan. I work with a lot of builders and they can be difficult to work with sometimes.

This is one very good reason why buyers of new homes need a buyer's agent to represent them in their purchase of a new home. I have had to go to bat for my new home buyers several times. Good Luck to you.

I agree with Nancy. If you have a buyer's agent and have been using the Arkansas Realtor Association forms, paragraph 3 says that the home must appraise for the purchase price or more. If it appraised for less, then the seller has the option of not selling you the house and you should be able to get your earnest money back (you would, of course, have to find a new house to purchase). The seller's other option is to sell you the house at the appraised value. All of the other terms and conditions of the contract would still apply, including the incentives.

He can also get his own appraisal, which may come out diffferent than yours, depending on the comparable properties used. I had a situation like this recently. In my case, it was a cash deal, so the buyers and sellers just split the difference between the two appraised values in order to agree on the purchase price.

However, if you are financing the property, the bank will only loan on the appraised value. If the seller wants to sell the house, he needs to sell it at the appraised value, unless you (as buyer) would be willing/able to pay the extra money. However, in your shoes I would go for the appraised value.

If you do not have a buyer's agent and did not use the ARA forms, then you should read your contract carefully to determine your options. If you don't understand something, consult a lawyer.

That's a good one! Continue to remind your builder to stay with the terms of the Contract. I'm assuming the house appraised for less than sales price. You are in a position of negotiating with the Seller, and you will find out how serious the builder is to sell this house. Hold firm!