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Permalink Reply by Tracey Martin on April 14, 2010 at 6:18am

If the buyer did not sign anything stating that they would pay the countered price even if the property does not appraise, I would advise them to move forward. Once the appraisal comes in, and it is less than the approved amount, get a copy of it and send it to the negotiator. In your cover letter make the argument that the buyer cannot get a loan for more the appraised value and,in fact ,no one will be able to get a loan for the approved amount because lenders today are very cautious and conservative when it comes to lending. I have done this
several times and have been successful at getting the approved price reduced. However, there are no guarantees that the lender will go for it. You need to make sure the buyer understands the risks. There is always a chance that B of A won't reduce the price and the deal will be dead. If the property appraise at the countered price, they will have to accept that as the price they will pay for the house. The appraisal cost money and the buyer's going to have to pay for it whether the deal closes or not. As long as the buyer understands what is going on and they are willing to proceed, give it a try. I try not to say "never" or "always" but this has worked for me every time the appraisal on a property has come in lower than the lender's approved price. B of A will have a hard time arguing against the appraisal because it is the best indicator of "fair market value." Good Luck!