There are times when a purchaser offers more than the house is "worth." It becomes apparent when the appraisal is lower than the purchase price. There are a few options on how to negotiate with the seller after a low appraisal. As a seller, you can require that the buyer come up with the additional cash to make up the difference between the appraisal and the purchase price, you can meet them in the middle between the purchase price and the appraisal, or you can drop your price to the appraised price. In my case, I dropped the purchase price to the appraised price. The other options are not too much fun, either, but hey, they are still options. The buyer can order another appraisal, possibly 3. If the 2nd appraisal comes in at the same price as the first appraisal, you're done. If it comes in much higher, you might need a 3rd appraisal to lock in the price to satisfy the buyer's lender. This can be costly, but it can be the difference of you as the seller making several thousand dollars or more...or not.

If the buyer has a contingency on the appraisal, they can walk away from the deal and keep their earnest money. If they don't, you can let them walk away and keep their earnest money. There are several options as you can see, but when the appraisal comes in lower than the purchase price, it certainly puts a wrench into the negotiations. Don't fret, though. Your agent should help you negotiate the lower appraisal price than the purchase price with no issues as long as you got a good realtor/real estate agent! Good luck!

http://www.WatchBobOnYouTube.com

0:00 Intro
0:27 Appraisal came back lower than the purchase price
0:46 Example of appraisal coming in lower
1:02 First option
1:31 Buyer's options if appraisal comes in low
1:55 Another option for the seller and buyer
2:27 What happens when you let a buyer back out of the contract
2:47 If the buyer cannot bring in the extra cash and the contingency has been previously waived
3:22 How to set the price after falling out of escrow with the first buyer