Florida real estate questions: What if the appraisal is low?
Most homes in Brevard County, Florida are purchased using a mortgage. A critical part of the mortgage approval process is the appraisal. Most of the time, in my experience, the appraisal is never an issue.
But if the appraised value is below the contracted purchase price, what does a buyer do?
From a buyer's perspective the best choice is to ask the seller to lower their price to the same figure. I have seen this done but not very often.
Look at it from the buyer's perspective if the appraisal was high and the buyer was asked to increase the offer price to meet a higher appraisal? The buyer's response would probably be somewhere in the "a contract is a contract" line of reasoning although the wording may be different!
Another option is to simply pay the difference. The lender is going to only loan a set percentage of the purchase price so as long as the buyer adds to the down payment, problem solved.
A buyer could take could take options one and two above and see if the seller will help out and possibly meet in the middle.
And lastly a buyer could simply walk away after all that is what a financing contingency is, isn't it?
By the way the appraisal issue doesn't only apply to mortgages as many cash buyers will still include an appraisal contingency.
Related article: "Is an appraisal necessary with a cash offer?"
For information on buying and selling a home in Viera, Florida, give me a call at 321-693-3850 or send me an email.