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A buyer made an offer to purchase a home using a VA loan, but the property's appraised value was determined to be less than the contract price. If the buyer really wants the property, which of the following choices is the buyer's best option?
Suggested Answer: B
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VA loans include an escape clause: buyers cannot be forced to purchase a home for more than its appraised value. However, if the buyer still wants the property, they can:
Pay the contract price, but must cover any amount above the VA appraised value in cash, since the VA will only guarantee the appraised portion.
Sellers are not forced to lower their price to the appraisal amount.
An FHA loan will not automatically cover the shortfall.
Thus, the best option is B.
24 comments · newest first
DO
Dottie
2 days ago
I feel stressed about this. I want the house but don’t have extra cash.
SH
Shaquana
7 days ago
Option D sounds risky. FHA loans have different rules.
CE
Celeste
12 days ago
Doing nothing isn’t smart. The seller won’t just drop the price.
JA
Jarod
18 days ago
I agree, but option C could work too. A second appraisal might help.
LA
Lashaunda
23 days ago
I think option B is the best. If I really want the house, I’ll pay the difference.
VE
Velda
28 days ago
Same here!
JU
Juan
1 month ago
I just want to avoid losing the house.
VI
Viola
1 month ago
I’d stick with option C. It’s more proactive.
VE
Velda
1 month ago
Right, VA loans have their own rules.
JU
Juan
2 months ago
I feel like option D is a long shot. FHA loans are different.
VI
Viola
2 months ago
Exactly! Option A is risky. The seller won't have to lower the price.
VE
Velda
2 months ago
True, but it’s worth a shot. Better than doing nothing.
JU
Juan
2 months ago
But what if the second appraisal is still low?
VI
Viola
2 months ago
I disagree. Option C could work. A second appraisal might help.
VE
Velda
2 months ago
I think option B is the best. If I really want the house, I’ll pay the difference.
LU
Luke
3 months ago
D seems too good to be true. Is there really an FHA lender that does that?
JE
Jess
3 months ago
Totally agree with B! Gotta do what it takes to secure the property.
NI
Nina
3 months ago
C sounds risky. What if the second appraisal is still low?
RE
Ressie
3 months ago
Actually, A is a common misconception. Sellers aren't obligated to sell at appraised value.
KA
Kayleigh
3 months ago
B is the best option if they really want the house.
AN
Andree
4 months ago
I don’t think switching to an FHA lender is a valid option here. I remember that FHA loans have different rules, but I can't recall the specifics.
LY
Lynna
5 months ago
I practiced a similar question where a buyer had to deal with a low appraisal. I think getting a second appraisal could be a good idea, but it might not guarantee anything.
TA
Tandra
5 months ago
I think the best option might be to make up the difference in cash, but I’m not entirely sure if that’s the only way to go about it.
AN
Annice
5 months ago
I remember something about VA loans and appraisals, but I'm not sure if the seller has to sell at the appraised value.