TREE_006_EBooklet

UNDER CONTRACT PROCESS APPRAISAL UNDER CONTRACT PROCESS LOAN OBJECTION/CONDITIONS
3 rd PHASE – APPRAISAL
What Is A Property Appraisal?
An appraisal is a standard part of the mortgage process. Banks and mortgage companies will give the borrower a loan amount based on
the appraised value of the property. The appraiser visits the home and, through the use of comparable properties, issues the Appraisal
Report. The loan will be issued using the home’s value as collateral, so it is important the home appraises at or above the contract price.
What Happens if the Appraisal Comes in Low?
If the Appraisal Report comes in below the contract price it represents a problem for the buyer. In the event this is the case there are
generally three options for the buyer:
• Renegotiate the contract to the appraised value
4 th PHASE – LOAN OBJECTION/CONDITIONS
Loan Objection Deadline
The Loan Objection deadline date, is the date by which the loan must be
satisfactory to the buyer in their subjective discretion. Specifically, “the
contract is conditional upon buyer determining, in buyer’s subjective
discretion, that the availability, terms, conditions, and cost of such new
loan are satisfactory to buyer.” By that date, if the buyer does not obtain
loan approval from their lender, the buyer may choose to terminate the
contact and receive a full refund of their earnest money.
Loan Conditions
The Loan Conditions are the terms provided by the lender to
the buyer under which the lender agrees to issue the loan. They
include the interest rate, length of loan agreement, and any
requirements the buyer must meet prior to obtaining the loan.
• Make up the delta between the appraised value and the contract price with additional cash at closing
• Terminate the contract and receives a full refund of their earnest money
Source: Realtor.com