Your question seems simple but it is not. Whenever the answer is, â€œIt dependsâ€¦â€ the question is more complex than it appears.
If you are serious about buying, get together with a Realtor and have the full conversation.
It depends upon what your contract says. Here in Topeka, the contract includes such language. Refer to your real estate agent, or if you don't have one, your contract/attorney.
Typically there is an FHA and/or VA addendum to most contracts which has a clause or space for putting in the value the property must appraise at (offer price) as a contingency. Read the wording carefully. Here in Florida it states the Buyer is not obligated to buy anything that does not appraise and has the right to walk and receive their deposit back. On a conventional loan, it is one of the financing contingencies. It even goes one step further to say: "Once Buyer provides Commitment to the Seller, the financing contingency is waived and Seller will be entitled to retain the deposit if the transaction does not close by the closing date, unless (1) the property appraises below the purchase price and either the parties cannot agree on a new purchase price, or the Buyer elects not to proceed..." These are standard in the Florida FAR and FAR BAR contracts. You need to check how contracts are written in your state.
I hope this helps.
Broker Associate, GRI, CDM
Real Estate Consulting, Marketing & Sales
Prudential Tropical Realty
Otherwise it's back to the negotiating table.