A low appraisal creates a gap between the contract price and the amount the lender will finance. The buyer must cover the difference in cash, you must reduce the price, or the deal collapses. Protect yourself by requiring an appraisal gap clause in the contract rider, which legally binds the buyer to cover the shortfall up to a specified dollar amount with their own funds.
From the seller playbook: Preparing for Appraisal Risk Before Listing
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
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