What happens if an appraisal comes in lower than the contract price? Ultimately, three things can happen in this situation:
1. Both parties can agree to lower the contract price to the appraised value. This tends to happen more often in buyer’s markets and isn’t common these days.
2. The buyer can walk away. Once they see the low appraisal, the buyer can decide that they don’t want to pay the contract price for the home and simply back out of the contract, depending on how the contract is written. (you will need to discuss this with your agent before choosing this option)
3. The buyer can pay the difference between the prices. In this extreme seller’s market, this happens quite frequently.
If you have any questions about appraisals or real estate in general, don’t hesitate to reach out to me. I’d love to speak with you.