Many buyers think a failed appraisal spells the end for their homeownership dreams. That’s not true at all. You have many options to choose from on how to proceed.
So, what happens if your home you recently purchased does not appraise?
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The buyers can cancel the purchase agreement. The buyers will receive their earnest money deposit back.
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Ask the sellers to reduce the purchase price to the appraised value. If they agree, an amendment is drawn up and both the parties sign reflecting the new purchase price.
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Buyer and seller can meet in the middle of the appraisal value and original contract price. For example, if the original price was $500,000 and the appraised value was $490,000 and they agree on a new purchase price of $495,000, the buyers will have to come in with an additional $5,000. The bank will only lend money on the appraised value.
“IF DONE CORRECTLY, IT’S A SIMPLE RENEGOTIATION.”
If done correctly it’s a simple renegotiation that makes both the buyer and seller happy with the end result.
If you have any additional questions, please don’t hesitate to contact me immediately.
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