Appraisals create unique challenges. Once the seller and buyer agree on price and terms, it's not smooth sailing.
First, the inspections need to come back acceptable. After that hurdle is the appraisal.
When the buyer is getting a mortgage their lender sends out a neutral third party appraiser. The appraiser determines the value of the property for lending purposes. The buyer cannot get a loan for more than the appraised value.
So, what if the appraisal come in lower than the offer?
The seller needs to come down in price in order for the lender to provide the mortgage to the buyer. If the seller refuses to reduce their sales price the deal could be dead.
The buyer can come to the closing with cash to make up the difference between the mortgage amount and the price the seller wants. But, why would anyone agree to over pay?
Once a buyer walks away from the deal, they can try to sell the inspections to the next buyer that comes along. This is one way to try and re-coup some of that money the buyer is out. It's a good deal for the new buyer because they can have the inspection reports at a reduced price.
The money the original buyer paid for the appraisal is a loss.
Sellers and buyers can agree on a sales price. Appraisals control the values.
If you need a competent, aggressive realtor who understands negotiating the ins and outs of the deal please call me.
Leigh Giannotti is the OWNER/Broker Associate of Serving Brevard Realty located at 950 N Courtenay Pkwy Ste 3, Merritt Island Florida 32953. Catalina Isles is the nearest neighborhood to our Real Estate office. Leigh has earned the prestigious Certified Distressed Property Expert (CDPE) designation. An appraisal of your homes value will cost about $400 or for a FREE current market assessment of your homes value please contact Leigh Giannotti.