Appraisal question (sale, mortgage, broker)

[sjs100]

For those of you who have bought homes recently, has anyone had an issue with the house not appraising at the purchase price? Was there renegotiation after this happened? Did you include a clause in your contract about this?

Thanks!

[ehmom]

Per my lawyer, no special clause is needed because the mortgage contingency will cover it (assuming you have that in your contract). Basically the bank won't give you a mortgage if it's appraised less than what you are purchasing it for. If you can't get a mortgage, then you can legally back out of the deal and get your deposit back.

My broker discussed this with me as well, because there's a slight chance that this may happen with my deal (we're waiting for the appraisal to come back now). If it does happen, she said that most sellers will renegotiate, because they don't want to start all over with trying to find another buyer.

[sjs100]

Thanks. I realize we could get out of the deal if we can't get a mortgage but I would rather negotiate if it came to this so I did not know if a clause was needed in the contracts for this.

[westchester]

nope no clause needed...were are u buying

[NYC Mama]

Well usually the clause says you'd have to get a second appraisal done. At least it was the case in the contract on the sale of our old house. Plus it depends how much lower it comes back at. It may be minimal, in which case you'd probably have to stick with the original price. All depends on the contract that you have. Read the fine print.