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Home Not Appraised, Do I Lose The Escrow Deposit If I Back Out?


The home seller accepted my negotiated offer of $350K on an equity sale. I was pre-qualified for a $350K home loan. However, the house later got appraised at only $280K. I deposited $7K for escrow account, paid the appraisal and home inspection fees. The bank now only approve $280K loan as appraised, but the seller cannot sell at $280K because he owes more than that. The seller wants to sell but trying to find ways to appeal or get better appraisals.
1. What should I do now?
2. If I back out, what are my loses? The process is taking too long and I am losing interest and want to look for another house. I have already paid the home appraisal and inspection. What else do I lose if I back out?
Thanks.

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4 Responses to “Home Not Appraised, Do I Lose The Escrow Deposit If I Back Out?”

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  1. 4
    Judy Says:

    What did the contract say that you signed? If it had a clause that if the house didn’t appraise at $350K you could back out, then you can, although you’ll be out the appraisal and inspection fees in any case.

  2. 3
    chatspla Says:

    READ the contract.
    Consult real estate attorney.
    Find out what you have obligated yourself to do and do it.

  3. 2
    goz1111 Says:

    Very common problem sellers are encountering in this down market, appraisals are coming in way below what the seller believes is a reasonable amount for the home, if the seller needs close to the 350K sell price to cover the loan, there is no way the seller will find another appraisal for 70K more, if the case the deal is over, you should be entitled to the escrow, the seller needs to realize they can not sell the house for the price listed

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