If there's a financing contingency it will be based on appraising. Buyer should have an out if property does not appraise and seller won't sell at the appraised price.

By the same token, if the value is there in the buyer's mind, they can pay more than appraised value so long as they are willing to bring the difference to closing between what the bank will finance and the sale price.

I don't think they need to put down more money with that % down. It's normally only with the low-down options under 20% I bet.

It would be rare in our market for there to be a mention of an appraisal with that much down. In FHA obviously, there is the rider that states it.

Nina Hollander nailed this one...

If an appraisal is below expected value you can contest it. I have done so 3 times since 2015, 1/3 were overturned, 2 remained and killed the deals. You have to have blatant errors caught or better comps that closed post appraisal or it feels like its next to impossible to get these guys to admit they were wrong.

I have nothing to add that has not already been said. It is tied to financing. If FHA and already over the FHA limit for the area, the buyer has already covered the difference with bringing more cash to the table. That is not uncommon in my area.

Just had this happened, the seller reduced the price down to appraise value and we closed.

I'm definitely with Nina Hollander on this one.

I recently had this happened and contested it.... The buyer decided the place was well worth what he was paying and we moved forward and closed.

The buyer should have an out if there was an appraisal contingency.

Thank you Nina Hollander 

Since we have so many VA contracts this will often cause a sale to fall through unless the seller lowers price to appraisal.

The closing will happen if the buyer has more money to cover the difference or seller would agree to reduce the price, otherwise....you have to start again with someone else.

It's very simple. Assuming the buyer really like the property and want to move forward with the sale.

• The real estate agent should re-negotiate with the sellers or sellers' agent
• Bring the difference between the offer price and the appraisal price
• Or Walk away assuming there is a Loan appraisal contingency in the purchase contract. 

With that much money down, the bank might make the loan in spite of the appraisal (although not over the appraised value).

It depends.

On the contract.

On the buyer.

On the seller.

On the property.

It's actually not uncommon in my market and that's why many buyers remove the appraisal and loan contingency in order to be competitive with multiple offers.   Of course, buyers having the funds necessary to make up for any shortfall is critical in the decision making process for a seller.   

One can contest the appraisal, failing in that the additional down payment may do the trick if the lender is OK with it.

Appraisal comes in low?  Yeah, that happens.  Here's the options in my experience:

1. Buyer makes up the difference (it happens).  Smart buyers put that into their offer!
2. Seller challenges the appraisal and orders a second one.
3. Seller agrees to reduce the price to the appraised value.
4. Buyer walks.

I've seen all four options.

Happened to my husband and me when we bought our house;  we were in a multiple offer situation and HAD to have the house, so we just paid the difference in cash.  

If there is an appraisal contingency, of course, the buyers have the option to void the contract if the house doesn't appraise for offer price and they don't wish to make up the difference.  Or, both parties can work out a compromise.  The bank is only going to lend on the appraised price;  it's up to the parties to make it work - or not. 

It depends on the particular situation.

In our area that happens routinely. All offers submitted have no appraisal contingiency to have a clean offer.

Even if a cash sale, we still offer an appraisal addendum to our buyer clients to protect them.

Depends, does the buyer really want it , go thru with the deal.

Well, here are the options in my opinion

1. Seller lowers price to appraisal
2. Buyer makes up the difference at closing
3. Buyer or seller walk from the deal

If I am the buyer and it does not appraise, the seller adjusts the price or I walk! Have represented a buyer who got an appraisal way under the purchase price and bought it anyway because his wife wanted it! Go figure!

You could protest it, or renogiate the price with seller. Buyer could bring money to the table or, assuming there is an appraisal contingency, back out of the deal

Options on both sides in either case.  

I always have an appraisal contingency in my contracts for my buyers.  I had one incident where the appraisal was unrealistically low and although it was disputed and "reviewed," the appraiser did not change his value.  My buyers opted to go with another lender, who did an appraised value at the correct fair market value which was consistent with the prior 3 sales in the building.  Regardless of the cash down, or even all cash offer, I always put in an appraisal contingency.

Depends a lot on who wants the deal to work more, buyer or seller.  Buyer may have to finance less, seller may have to settle for less, hopefully none of the agents get nervous and decide to chip in for someone else's home.

ditto to what Nina said....

Peter Mohylsky The appraisal only has to cover the loan amount. Now it's up to the buyer and seller to negotiate lowering the price, the buyer accepting the contract price and appraisal as written or splitting the difference.

There will be lots to be said that's for sure....

This creates a conflict when the Seller's Agent wants to get a new appraisal . They will want your Buyer to IGNORE the Lower Appraisal in favor of the new Higher one ! Is that really fair to the Buyer ?

depends on how the contract was written - is there a contigency?

You have to look at the comps the appraiser used and see if the appraisal is valid or if they made another mistake. If they did make a mistake, you can appeal to the loan officer to get a manager involved and provide comps to send to the appraiser to review. 

Lender wants to be able to get their money back in case of default. If buyers pays $390,000.00 for a $300,000.00 valued house, i cans ee where the lender would want their risk to stay under $300, so buyer has $90,000.00 to kick in, and feels the house is worth that to him, they should be able to make deal work.

It depends on the purchase contract.