Would you pay more than appraisal?

Question

The purchase price for this property was $95,900 and the numbers worked out. The appraisal came back at $93,000..which is all the bank will lend on.

The seller agreed to split the difference at $94,500 meaning I’d have to bring an additional $1,500 which would come out of pocket along with minor repairs I’d have to do. The numbers would still work but is it smart to pay more than a property is worth in a time where lots of things are unknown?

Anthony Bobbitt · Answer

@Mason Hickman yes it is a duplex with both units occupied! My worry had to do with a worst case scenario exit plan which would be to resell but since I’m starting the deal off $1500 under I was concerned. He agreed to a purchase price of $94,000.

Thank you for your feedback Mason. Extremely appreciated.

Mason Hickman · Answer

@Anthony Bobbitt

You could always appeal the appraisal to try to raise it but it sounds like if you get the appraisal to come in higher, the seller will probably expect to revert back to the original price or split the new difference in prices. I think you have a reasonable seller on the hook that's willing to work with you and I'd try to work through it and get the deal done. The appraiser helped you negotiate a better price by 1.5%! As I'm sure you've seen many other places on BP, I would just make sure you have plenty of reserves based on the current environment. Is the house tenant occupied?