Value is supposed to be taken from the last three most similar homes as close to the subject as possible, also taking into consideration the asking prices of whats available for sale now. What happens when there have been only two sales within the last 9 months and one was 5 miles away? We are facing those problems.At any rate, if the appraised value doesnt work then challenge the appraisal or, as another said, walk away. Maybe you can get sellers to accept your 'or appraised, whichever is less' clause. That will be a pound of Sees candy if you use it and it works. lol
When an appraisal comes in low the buyer has two choices: renegotiate the sales price to a lowered amount reflected by the appraisal or come up with more money because with a low appraisal the bank will lower the value to what the appraiser has stated it to be which will in turn lower the amount they are willing to lend. Sometimes the Realtor can offer and suggest better comps to the appraiser for review but if they stick with the original value, your only two options are to renegotiate the sales price or come up with a larger down payment to buy the property for more than its current value. Of course there is a thrid option - walk away from the transaction.