can we buy a house if the appraisal is less than the selling price?

Asked by Abby, Boston, MA Fri May 29, 2009

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Greg & Donna…, Agent, Yarmouth Port, MA
Sun May 31, 2009
Abby..You can definitely purchase the home...the down side is that a mortgage is usually based on a certain percentage that the bank will lend. If the house comes under the appraised value you may have to make up the difference. If you love the house and plan to live in it for about 3 to 5 years it still would be a wise investment.. we find homes here on the Cape sometimes not appraising, but the Buyer is willing to pay the difference..or get a smaller loan..I wish you luck...It is a wonderful adventure...Donna Lapsley
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Monroe Heyman, , Jamaica Plain, MA
Fri May 29, 2009
Dear Abby,
It depends upon how much money you are putting down. I can put you in touch with an excellent mortgage broker who would be able to answer all of your mortgage related questions.
Monroe Heyman
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Territory.c…, Agent, MA,
Fri May 29, 2009
Hi, Abby!
I am wondering if you are referring to the appraised number found on the listing sheet of a specific property or if you have actually started the purchase process and your bank has come back with an appraised value lower than the price you have agreed to pay for the property? I ask because there is a big difference between the two.
Often home buyers will use the appraised value shown on the listing sheet of a property as a measurement of current market value but they shouldn't because there are quite a few variables that could make that appraisal number wrong. So, the answer to your question is, yes, you can still buy a property if the appraised value on the listing page is lower than the asking price. What matters is the appraised value that your bank comes up with at the time of the purchase in order to deliver you your commitment. If your bank comes back with a lower number they may not give you your loan, fearing that you are over paying for the property and therefore if you tried to re-sell they would lose money.

I hope that helps. But feel free to contact us if you have any further questions (we are exclusive buyer agents, hired to protect the home buyer's interests in a purchase ONLY):
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