My appraisal is less than the sale price. What does that mean for me?
It is very risky to purchase a home for more than the appraised value.
First, get a copy of the appraisal. The appraisal is a professional opinion as to the value of the home you want to purchase. Appraisers have to follow rules in arriving at the value of a property, and lenders are not allowed to interfere with the appraisers judgment. The lender is required to send you a copy of the appraisal. If you havent received a copy, ask your lender for it.
A good next step is to ask the seller to reduce the price on the home. You can often use the lower appraised value to negotiate a reduction in the sales price of the home. The appraisal is strong evidence that the price was above the market value of the home.
If the seller wont reduce the price on the home, you may want to cancel the sale. Consider consulting an attorney about your options. Depending on the terms of your purchase contract, there may be costs associated with cancelling the sale. However, these costs are likely small compared to buying a home that isnt worth what you paid for it.