What If...the Property Doesn't Appraise Out At Purchase Time?
What happens, or should happen, if a home you're selling on a L/O doesn't appraise out at the agreed-upon option purchase price when the T/B decides to buy? What would happen if the appraisal were *way* low (like if the market bottomed out just at the wrong time)? Can you tell I'm playing devil's advocate here? I'd like to hear strategies and stories if you'd like to share your experiences! Thanks!
then the purchaser is whats called "out of the money" where the market value of the property is below what the agreed upon purchase price is. If the appraisal doesnt come thru then they have one of two options...come up with more money down to complete the sale or walk away from their option...provisions in the contract can be inserted in the event this type of thing happens...some options could offer an extension, owner financing, reduction on price, etc. the possibilities are endless...they just need to be negotiated and put into the contract. if they are not then the purchaser is out of luck and out of their option price money....
if it is "way low" and doesn't appr. its a bad deal. that's the reason they are appraised......km