A Buyer asked the following question on a real estate question board for the general public:

appraisal price came back $6K less than agreed to price. seller was paying half our closing costs. i dont think i should pay anything more or pay the closing costs he agreed to pay now. we will pay the appraisal price and still expect the sellar to pay his agreed to closing cost contribution. can we ask the sellars agent or the bank to pick this portion of the closing costs if he flat out refuses. any advice ?

This is likely to happen more often as the market values trend down and pricing is behind market values.

I had a couple of questions before giving an answer?

1)   Why don't you ask your agent?  Did you make the mistake of trying to buy a house unrepresented?

2)  How come the offer is more than appraisal?   A good agent would have been able to get you a purchase price under the appraisal price in this market.

My answer to the anonymous buyer:

This is a great question to ask your Realtor. If you used the standard MLS contracts, receiving an appraisal less than purchase price reopens the negotiations in several ways.  It also allows you to cancel the transaction without penalty. Have your agent explain all the options to you. You can ask for any of those options, but you need a negotiation expert to get everyone to come together.  Did your agent discuss this possibilty and various options when you first signed the purchase and sale agreement?

You, as the buyer, may not want to pay any more than the appraised price and your lender will not lend you more.   The seller may want you to make up the difference since they already are giving you money for costs.   The agents (provided you didn't try and do this yourself) will try and get this to closing if that is what is in the best interest of each client.  The lender will want it to close because they have already done work and spent money to get this far. Do not expect the bank to offer the $6,000.

Under your scenario the seller will end up with $6K less in their pocket at closing. They may be willing to let your offer go away,  put the home back on the market or take it off the market altogether.

With only a $6K difference you should all be able to come to mutual agreement especially if you are serious about buying and the sellers are serious about selling. It will be necessary for there to be some give and take on everyone's part.

Good luck getting this together. 

Gary McNinch holds the industry designation of Certified Negotiation Expert.  Our job is to represent our clients strongly, anticipate situations and options and plan negotiation strategies.  The question above highlights the importance of having successful veteran negotiators.