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lwpat, Attorney
Category: Real Estate Law
Satisfied Customers: 25386
Experience:  Practicing attorney with expertise in easements
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We are purchasing a home and the appraisal came back $2,400

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We are purchasing a home and the appraisal came back $2,400 less than what our original accepted offer was.

Is it customary to ask the sellers to lower the price based on the appraisal? We have an appraisal contingency but our lender took so long to get the appraisal going, the appraisal came in past the contingency period, although we have not signed off on the contingency yet. Our loan is less than the purchase price since we put 20% down. It's just an investment property for us, so we are not attached to the place.

If the seller says no to the price drop and we decide to back out, what would happen to our earnest money and does the title company decide if we get our earnest money deposit back or not?

Thank you!
Thanks for using JA. I will do my best to answer your questions. DON’T FORGET the your deposit is not used to compensate me until you rate my service.

There is certainly no harm in asking the seller to reduce to the appraisal. However, since the contingency period has expired, the seller can hold you to the contract price. If you back out, generally the seller gets to keep your earnest money and they are the ones that decide whether to keep it or not and you can expect them to keep it. Your contract will set out specifically how the earnest money will be handled if you default so you need to refer to the fine print in the contract. Most contracts give the seller the option of keeping the earnest money or suing you to force you to buy (specific performance). The actual terms of the contract are what will govern your rights. The title company is not the one that decides.
Customer: replied 3 years ago.

Thanks. We have not released any of our contingencies yet. Does that make any difference whether we get our earnest money deposit back?



If the contingency period has expired, then it does not matter whether you have signed off or not since the contract required that you exercise your contingency by that date or you are considered to have waived your rights. This is based on the normal contract of sale but you can review your specific contract to see if that is the way it is stated.
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