Wednesday May 21st - "Appraisal too Low?" Question: We're buying a house and the appraisal came in $21,000 too low. Apparently the appraiser didn't make accurate adjustments for the lot size and after being pressured by our lender, the appraisal was upwardly adjusted by $13,500. The seller has quickly agreed, without us asking, to lower the price to meet the appraisal, and has issued a new contract at that price, but we are skeptical about the pressure the lender put on the appraiser to adjust the appraisal. Since the seller was not obligated to offer a lower price, which would allow us to void the deal based on mortgage contingency, are we obligated to sign a new contract for the lower sale price? Answer: How do you benefit as a buyer from an upwardly-revised appraisal? A higher appraisal leads to a steeper price and a larger monthly mortgage payment. If you are not obligated with your current lender then, perhaps you will want to see if better financing is available elsewhere. As to your commitment under the sale agreement, it depends how the document is written. It may well provide that you are obligated to go through with the sale if the owners reduce the sale price to the appraised value. For details, have an attorney review the sale agreement and your loan papers.

Published: May 21, 2008

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