House we are buying is not appraising for the offer price. What now???

Question

We are purchasing a bank owned home and the appraisal came back at $11,000 lower than our offer price. We sent a request to the bank for a price reduction over a week ago, but haven't had a response yet. What happens now??? Our lender is proceeding with the lower price just to keep things moving, and we need to close by Aug. 22. Do most banks accept the lower price? We are not willing to pay the cash difference just to get the house.

Answer 1

If your Bank hasn't called You by Monday, call THEM & find out what's going on... Most Banks are REALLY Busy -handling Foreclosure Sales just now- so it's NO Surprise they haven't gotten back to You yet. My Guess is that they'll Accept the Appraisal reduction- so don't worry about it. YOUR concern- should be about what to do about the Ugly carpeting in the Livingroom! Good luck!  :)

Answer 2

They will lower it, unless they already did an appraisal and theirs is different (should be very close).

They know they can not sell over the appraisal, they will let you have it, but the paper has many desks to pass over.   It will help speed things up if your agent is a go-getter.

Answer 3

Do you have a Realtor?  If so, call him/her ASAP.  Usually in a purchase contract, there is a stipulation that if the home does not appraise for the purchase price, the price has to be reduced to the appraised value.  Check your contract.  Most lenders will not lend above the appraised value, so you need to get this straight.  Good luck!

Answer 4

Either the seller (selling bank in this case) lowers the price, or you come up with the difference or a combination of the two (possibly the realtors could help out and lower their commissions a bit to make the whole thing happen).  Assuming you have a financing contingency, if the seller doesn't lower the price you can exercise that contingency and kill the contract.  I suspect they will lower the price (at least part of the way) as they probably just want the thing gone, but hard to say for sure and no telling how long it may take for them to get back to you.  

Answer 5

Depends on whether the selling bank trusts the appraisal provided.  Was it an appraiser of the bank's selection, or of the lender?  Before the bank coughs out $11,000, it might request an additional appraisal.  If the bank decides that the property is worth the asking price, they may well refuse your offer and wait for another.