During these tough times we will likely encounter a situation where the appraised value does not support the sales price.
In some cases the seller will accept the appraised value and renegotiate. However in the case of a seller who won’t but really do want to sell their home, what should you do?
Scenario: Sellers property is listed too high. Completed appraisal supports 15,000 less than the agreed purchase price.
Assuming this is an FHA loan with the seller paying 3% toward closing costs. Seller doesn’t want to accept less than the purchase price and threatens to put it back on the market and return the earnest money.
Fact: If another buyer comes along the same thing will happen. The value is what it is and the seller will be right back where they started. Only an all cash buyer or a buyer with a large down payment can close this sale. In a buyers market it is not likely that any buyer would want to pay more for a property than what it is wort. A lot of buyers in this market will be FHA approved. Assuming the appraiser “pushed” the value an underwriter would disagree with the value and the seller would end up with the same result. If the market is declining time lost is money lost.
I hope that somewhere this might help someone get that tough deal closed.