Sticking With the Bird in the Hand
The reason that Buyers and Sellers typically renegotiate the price when a home appraises low is that the Seller has no guaranty that . . . it won’t happen again.
Either with the same Buyer, and another lender.
Or, if they scuttle the deal, with another Buyer and a new lender.
FHA vs. Conventional
That’s especially the case with an FHA loan, where the low appraisal sticks with the property for six months.
But, even if the loan is what’s called “conforming” or “conventional” (same thing), the Seller has no guaranties.
So, especially when the market *usually decelerates (late Fall) vs. accelerates (after the Holidays), most Sellers opt to cut their losses and renegotiate a new price closer to the appraised value.
*See also, “Interest Rate Scare Passes (For Now).”
