I hope this helps!
Karen Paytas, GRI, CMS
Real Living Kee Realty
As you may have read,,,,nearly EVERYTHING in a contract is negotiable.
Some contracts, expecially those received from a buyer with 'big bank' lending will stipulate the BUYER will pay the difference between the appriased value and negotaited price. NOTE: this is how many of the 'big banks' sell their bank owned properties.
Some lenders or lending products will not allow the buyer to pay the difference in cash.
So, without seeing the CONTRACT, indenffing the lender, and the loan product in play....the protections afforded to the buyer can not be know.
Buyers and sellers have demanded more options and choices in the buying and selling process. These options have created more comlexity. It's time to pick up the phone and call a Royal Oak real estate professional.
The most important thing though is to have your agent pull up all the comparables in the immediate area to confirm if the appraiser may have trouble finding homes that will allow your new purchase to appraise.
Traditionally, after an offer is accepted, you will have 7 days to hire a private home inspection (est $300). Once inspection is successful, the appraisal is ordered. (est $400)
NOTE: If you and your agent think it will be difficult to get a successful appraisal - but you wish to try anyway, I suggest you write up your offer with the appraisal first, and then the home inspection following a successful appraisal. This would protect you from spending that extra $300 if home does not appraise.
Lender denies: Most Metro Detroit Realtors' contracts specify that if the lender denies the mortgage, (at no fault to the purchaser) that the contract shall be considered null and void - and all earnest deposit checks returned to the purchaser.
So hope this helps!
Keller Williams Realty
As far as "nothing lost, nothing gained," as previously mentioned, unless you consider your $450 FHA appraisal and approximate $350 private home inspection "nothing," I guess that is true... However, I recommend all buyers be fairly confident that the home will appraise at local values. An estimated 15% to 20% of local appraisals are coming in low these days as sellers are over-reaching and buyers over-bid in the low-inventory feeding frenzy. 2 or 3 (or more) failed sales at $800 a pop gets expensive fast. Good luck!