What Happens If Home Does Not Appraise For FMV?
What happens at the end of the option contract if the home does not appraise for the FMV stated in the option contract?
Example: Sell price is $260K (today) with estimated $275K (approx. 7%) price after 12 months. Market stalls and the home does not increase 7%, only 2%.
What happens with the seller if he does not want to sell for that low? What happens with all money, i.e. option money and rent credit?
Please let me know I have a home that I feel might not appraise for FMV a year from now.
Thank you for your insights!!!
[ Edited by slushman on Date 08/21/2006 ]
Unless the market fell apart and the buyer wants out, you can get a second opinion (or two), you can carry back a second, and/or you can negotiate something else that would make it work. Or lose the deal.
But what happens with the option money and rent credit?
You have exclusive right to buy for that price during the Option term. The Seller can carry a second or even lower the price (if he has a big heart). Within 5 percent of the comps, it should appraise for the exact sale price.
[addsig]