If the appraisal comes in for less than the agreed sale price, the parties to the sale or purchase might have to take further action depending on the specific terms of the real estate contract.
There are many possibilities depending on the terms of the sale contract: the sale could be cancelled; the parties could renegotiate the price; the lender could require a higher down payment; or the lender could refuse to lend at all. It all depends on how the deal is structured.
Sometimes appraisals can be successfully challenged, but it is difficult to do.
Professional appraisers use recent sales data, market trends, current property condition and other types of data to appraise a home or commercial property. Appraisers are licensed professionals.
Mortgage lenders require an appraisal by a professional appraiser of their choice prior to making a commitment to lend money on a property.
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