What if a House Appraisal Comes in Higher / Lower than Purchase Price?

Описание: https://lo.primelending.com/swoloszyk What happens if the appraised value comes in higher than the purchase price? Can I tap into this equity and use it towards my down-payment? What happens if the appraised value comes in lower than the purchase price? By Steven Woloszyk NMLS #442306.

Video Transcript
Good morning friends, it’s Steven Woloszyk from Prime Lending. Today is Tuesday, it’s August 16th and that means it’s time for Tuesday’s 2 minute tip.
So question that I get quite regularly is, ‘Hey Steven what happens if I agree to buy a home at 150 but it appraises at 160? Can I use that difference for my down payment or for my home improvements or maybe for that big screen TV?’
The answer to that question is no. Can’t do that.
We’re going to go by the appraised value or the purchased price, the lesser of the two. So you can tap into instant equity. You made a great decision, congratulations but what’s more likely to occur especially in the market that we’re in today, where people are offering above list price is that there’s a chance that the appraised value could come in lower than we agreed to pay for the price of the home and there are 4 scenarios that can happen.
Number 1, the house is agreed upon at 150. It appraises at 145, buyer says ‘okay, I’m agreeing to the 150. I’m going to pay 150 and I’m just going to come up with the difference out of my pocket because in essence we agree to market market when we came to terms at 150.’
Number 2, the buyer can say, ‘forget this. I’m not paying 150 for a house at 145. Seller, sell it to me for 145.’
Number 3, the buyer and seller can come to terms and maybe meet in the middle. ‘Alright, I agree to pay 150. The appraisal is 145. Let’s meet in the middle and let’s do 147.5’ or four, the deal could fall a part altogether. Buyer can say forget it, everybody can dig their heels in and we have no deal. That’s not likely to occur especially if a value of 5 grand difference between purchase price and appraised value but those are the possible outcomes.
That’s Tuesday’s tip, its what happens if the appraised value is higher or lower than the agreed upon the purchased price.
I thank you as always for tuning in. Hitting like, sharing and commenting and as always, make it a great day.

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