Quote:
Originally Posted by 1insider
Unless it's a 100% loan, the appraisal needs to hit the contract price. Anything less than the contract price is going to require more money down from the buyer unless the seller agrees to reduce price.
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Quote:
Originally Posted by hooligan
Correct. That wasn't the OP's question, though.
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Seems to me that answers the OP's question 95%. The OP didn't really offer all the information needed to get a 100% answer.
I'm not a loan officer, but my experience has been that the answer will vary a bit depending upon the loan product the buyer is using. In my market, I don't see products like VA, FHA, USDA, etc. I just see standard conforming loans. Generally speaking, my experience with that loan product is that the appraisal needs to meet or exceed the offer price up to a point where the loan is 80% of the purchase price. If a buyer is financing less than 80% then there tends to be some wiggle room in the appraisal.
Example:
House sells for $500K. If the buyer is putting down $50K (10%) then the appraisal needs to come in at $500K or more. If it comes in at $480K then someone will need to bridge that gap of $20K whether it's the buyer putting down more cash, the seller reducing the price, or some combination of both. If the buyer had put down $200K and the appraisal came in at $480K then the loan of $300K would still be approved.