What if it doesn't appraise?

Sometimes a home won't appraise for the sales price. What happens then? Well there is a built in loop-hole in our purchase and sale agreements that states that if the appraiser can't find value, the buyer can back out and get their earnest money deposit returned to them. This is also to protect the lender, of course they are not going to get into an upside down deal. There are other solutions though. The seller can reduce the sales price to meet the appraisers value, in order to save the deal. You would think that they would do this for sure because they will probably meet the same problem with the next buyer, if there is a lender involved in the deal. Or, if the buyer really wants the home and the seller will not reduce, the buyer can come in with the difference in cash. Not a good solution. Who wants to overpay? Another thing to consider is that when you purchase for cash, you are not required to get an appraisal. The appraiser is hired by the lender and in Idaho it is customary for the seller to pay the appraisal. In a cash deal, the seller might not agree to pay for it, but it would still be wise to get one. I met an appraiser just this past week who will do a 'consult' for only $150 (rather than a full appraisal for $350-$400). This, like a home inspection, would be money well spent and could potentially save you thousands or more.