they are not lending money on an overpriced home. An appraisal is an opinion, and although there are certain guidelines, opinions can vary from appraiser to appraiser. In Orlando's market, appraisers are having a difficult time, with rising prices, lack of good comparable properties, and distressed sales still in markets.
What happens if your home appraisal price is less than your purchase price?
You have a few options...
- You can renegotiate the purchase price with the seller. Ask the seller to reduce the purchase price to equal the appraisal price. If agreeable both parties should sign an addendum changing the price. Send signed addendum to your lender and move forward to closing.
- Restructure your loan or pay the difference in cash. For example if you are putting 20% + as a down payment. Consider putting down less money such as 10% and paying difference in cash. Or keep loan structure the same and pay difference in cash.
- Walk away from contract. If none of the options above are feasible. Then sign a cancellation of contract and get your escrow deposit refunded.