When buying a house, one of the steps your mortgage lender will require is an appraisal. An appraisal is a process used to determine the value of a home right now in today' economy and market, and you should understand that you may experience problems with the deal if the appraisal does not come back with an amount that is at least equal to the amount you offered to pay the seller for the house. If the amount is less, here are some of the options you have as the buyer.
You could continue the deal as planned
The first option you have is to do nothing about it and simply continue the process of buying the house even though it did not appraise high enough. Now, if you do this, you should realize there may be some consequences for you. The main consequence is that you might need to come up with a larger size down payment in order to get the loan. This could happen due to the way banks will only lend a certain percentage of a home's value. If the value is less than expected, the bank may decrease the amount they were going to lend you.
You could ask the seller to modify the price
The second option you have is to talk to your agent about asking the seller to reduce the price to the amount listed on the appraisal. If you can get this to work out, you should have no problems with the loan for the house, and you will benefit because you will pay a lower price for the home.
You could walk away from the deal
As long as your purchase offer included an appraisal contingency, you will have the legal right to walk away from the deal if the appraisal does not come back with an amount that is at least equal to the purchase offer price. Walking away from the deal will delay moving into a house, though, as it would put you back to the start of the home-buying process, and that is one thing you should consider before you decide to just walk away from the deal.
When an appraisal is not high enough, lenders typically have problems completing the loans for the houses unless the selling prices drop. If you experience this situation when buying a house, talk to your real estate agent to learn more about your options.