Appraised Value vs. Purchase Price | Home Buyer Tips
Channel: The Luevanos Group at eXp Realty | Los Angeles
Date: 2021-01-22

What is the difference between appraisal and purchase price?

Purchase price is what the seller and buyer agree upon as the price of the home whereas appraised value is what the bank believes the home is worth.

If the appraised value of the home is less than what the purchase price is, then the buyer will need to pay out of pocket for the difference. They can also negotiate the price down with the seller or meet in the middle.

However, if the buyer does not have the money to cover a short appraisal and the seller is not willing to budge on price, then you may cancel escrow.

As long as you have your appraisal contingency active, you will get your earnest money deposit back.

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