Finance
When a property appraises for LESS than the agreed purchase price, the buyer faces the challenge of:
AA required price increase to match the appraisal
BPotentially needing to make up the difference in cash or renegotiate the price✓ Correct
CAutomatic loan approval at the contract price
DThe lender ignoring the appraisal for conforming loans
Explanation
Lenders base loans on the lesser of purchase price or appraised value. If the appraisal comes in low, the buyer may need to renegotiate the price, bring additional cash to closing, or cancel (if there is an appraisal contingency).
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