Question from Evelyn Getz:
If the buyer's appraisal ($35,000) values the property below the selling price ($55,000) and the seller has an appraisal done that values the property slightly above the selling price ($56,000), is the buyer entitled to the refund of earnest money is he decides not to buy the house due to the variance ($21,000) in the appraised values?
The seller's appraisal was done after the commitment and closing dates had passed (no extension of the sales agreement was signed by the buyer).
Answer By William Bronchick:
In most cases, the appraiser is hired by the buyer or his lender. The contract should specify who retains the services of the appraiser and whether the contract is contingent upon the appraisal. If it is contingent upon appraisal and the buyer is permitted to choose the appraiser, then the buyer can terminate the contract and receive his earnest money back.
Disclaimer: The foregoing is not intended to be given as legal, financial or tax advice, but intended for instructional use only. If you require legal, financial or tax advice you should seek the assistance of a qualified professional.
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