Appraisals are one of the most important aspect of your loan. It’s important to use a local lender because they are familiar with the area and the appraisers are familiar with the area. If you find yourself trying to purchase or sell a home and the home does not appraise for the value of the contract, there are basically 3 choices.
1. The Seller can lower the price to what it appraises for
2. The Buyer can pay the difference—the extra on top of their down payment
3. The Seller can refuse to lower the price, the Buyer can refuse to make up the difference and the transaction can be cancelled
If you are the Buyer of a transaction, it’s good to know that the appraisal is one of the built-in contingencies of the contract, so if you find yourself in a situation where you are needing to go with option 3, in the state of Arizona, you can get your earnest money back even if it’s outside your inspection period.