Everyone involved in a financed home purchase tends to hold their breath until the appraisal report is completed and submitted to the lender. An appraisal value that’s lower than the accepted offer can break the deal apart because the lender needs someone to pay them the difference between the two dollar amounts.

The buyer could apply for a loan with another lender and hope things go more smoothly with a different appraiser. However, this approach is not allowed for an FHA loan. In this case, the appraisal’s tied to the property, not the lender, and only one report’s permitted.

In many cases, the buyer or seller will contribute the difference between the appraisal value and sale price as a closing cost. Who contributes is a matter for negotiation, but it’s frequently split 50/50 between the two parties.

However, some buyers will refuse to purchase a home that is now considered overpriced, and the Florida purchase contract allows the buyer to cancel the deal if the appraisal value is lower than the sale price.  Under this circumstance, sellers may lower the sale price to the appraisal value rather than face the delay and stress of putting the house back on the market and hoping that the next buyer pays cash or has better luck with an appraisal.

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