A high percentage of the country is in a declining market which causes appraisals to come in low.
I have seen it in NY and NJ plenty of times.
You are correct that you (as the seller ) will not be protected if the appraisal comes in low.
As a precaution, you can ask your Realtor to make sure there are supportive comps for the sales price of your home, but it is not always a guarantee that an appraiser would accept them. There are many reasons why an appraiser will use some comps over others.
Having said that, there won't be any extra costs to you if the buyer gets an FHA loan. The buyer might also have an easier time obtaining an FHA loan because of various factors related to their income, assets and credit.
What you could do is delay signing the ammendatory clause until after the appraisal is done. Most lenders don't require it in order to start the loan. They could even issue a committment to the buyer and condition that the ammendatory be signed sometime before closing.
This way, by contract, the buyer might still tied to obtaining conventional financing.
Please run this idea by your attorney.
Hope this was helpful.
Good luck.... more