Hi All,
Well, I had this happen recently.
Basically there are one of 4 situation that occur when a property under contract does not appraise.
1. The Seller has to reduce the purchase price to the Appraised Price.
2. The Buyer has to pay the difference between the Appraised Price and the Contract Price (out of pocket).
3. There is some other negotiated agreement between the Buyer and Seller to bridge the gap between the Appraised Price and the Contract Price.
4. The deal falls apart. If the deal falls apart, the Buyer should be entitled to a full refund of the Binder/Escrow Deposit.
With my most recent closing, the Buyer and Seller agreed to renegotiate the Purchase Price.
Let me know if you have any questions. Feel free to all me at 850.545.9317, or email me chris@ringtherivers.com
Until Next Time!!!