Hi, I am John Collins, San Diego Realtor, and I want to talk a little bit today about appraisals. Specifically what happens during a real estate purchase when the appraisal does not cover the purchase price.
It is important to understand that the bank lends on what they think the property is worth, not what the buyer has agreed to pay. So we get to this point is escrow, and it can be scary because all of a sudden there's a gap between what the buyer has agreed to pay and where their money is coming from, the amount of money they have to spend from the bank.
Now this doesn't necessarily mean that that the deal falls apart, absolutely not. This is where the real estate agent will come in and help guide negotiation and get all parties to the finish line, which is the goal. The buyer might bring a little more cash to the table, the seller might come down a little asking price. Often it is a combination of the two, but your Realtor will help guide you through that negotiation.
I hope this information is helpful. If there's anything I can do for any questions I an answer please call me my name my name is John Collins. You can contact me online at BeachRealtySanDiego.com