if my house appraises less than our sales price which is our break even, will the realtor let us out of the contract?

Asked by Nan, Andover, NJ Tue Sep 6, 2011

we are waiting to hear back from the appraiser, if it comes back lower than our sale price we are unable to lower the price of our home because we will not be able to pay the commission. will the realtor accept less commission or is the deal over?

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Terri Vellios, Agent, Campbell, CA
Tue Sep 6, 2011
You have two contracts. One with your Realtor to sell your house under the terms and conditions of your listing agreement. Then you have a contract with the Buyer to sell under the terms and conditions you mutually agreed to.

It is best to read and understand what you signed. That is your agent's job.

Regarding reducing the commission, it is not up to the agent, but up to the BROKER.

Good luck on your house appraising at purchase price.
Web Reference:  http://www.terrivellios.com
1 vote
Margaret Has…, Agent, Tampa, FL
Tue Sep 6, 2011
If you are the seller and have a contract for a certain price with a buyer, and the house appraises for less than the contract price, three things can happen. The buyer can make up the difference with their own cash; the seller can lower the price (which in your case, you can't do); or the contract becomes null and void.
1 vote
Jeanne Feeni…, Agent, Basking Ridge, NJ
Sat Sep 10, 2011
Hi Lucy, you've gotten great info already - I just want to reinforce the suggestion that you sit down and discuss with your agent and attorney if you've engaged one, the particulars of your situation and specific terms of your contract. Much will depend on those terms. Very likely you will have your answer regarding the appraisal quite soon so another recommendation would be to try to relax. I know it is hugely stressful. Good luck to you!

Jeanne Feenick
Unwavering Commitment to Service
0 votes
Molly Hay -…, Agent, Columbus, OH
Wed Sep 7, 2011
One of the homes I listed at the beginning of the year had a "Cut Apprasial" It was extrememly low and my seller couldn't go much lower so the buyer and seller split the difference. However, depending on the type of financing your buyer is doing there is a financing contigency in all contracts. If the home doesn't appraise than the buyer will be unable to get financing and the deal is dead. Talk with your agent to run through all different senarios. Good Luck!
0 votes
Kenneth Verb…, Agent, PRINCETON, NJ
Wed Sep 7, 2011
Lucy,from your question you appear to be a seller though you show as buyer under title. If you are buying and house under appraises whether you must buy or not depends upon the terms of contract of sale. Often attorneys will add a clause where seller will either reduce price or buyer can walk. This is not always the case. I have had contracts where even if a home underappraises by a certain amount the sale goes thru. (especially common with large down payments)
If you are seller then your listing agreement terms are what cover your duties to your agents and the contract terms for the sale will effect the sale. Under appraising alone may not be grounds for reducing your sale price. Speak with your attorney. If however it does and you become a short sale, negotiations may begin with Realtors, your lender and your buyer. Until you check with all these parties you may not know all your options. (lender could forgive some of your debt or buyer could up their down payment if needed) Buyer could also try getting another appraisal as these are opinions of value and subject to variance.
0 votes
Margaret Has…, Agent, Tampa, FL
Tue Sep 6, 2011
Also, you can ask the Realtors to contribute something, but they are under no obligation to do so.
0 votes
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