An appraisal could require a renegotiation if the property value comes in lower than the sales price. The appraised value dictates the maximum amount the lender will allow the buyers to borrow, minus their down payment. Depending on how the contract was written, if the appraisal is low, we can:
- Ask the buyer to come up with extra cash to make up the difference between the loan amount and the purchase price.
- Reduce your price to the appraised value.
- Split the difference with the buyer.
- Cancel the contract.
Should this happen, we’ll explore all available options in the context of the contract and market conditions.