Real Estate Math
A property is under contract for $285,000. The appraisal comes in at $270,000. The lender will loan 80% of appraised value. How much additional cash must the buyer bring to the table beyond their planned 20% down on the contract price?
A$15,000
B$12,000✓ Correct
C$27,000
D$0
Explanation
Planned loan (80% of contract price): $285,000 x 80% = $228,000. Lender will only loan 80% of appraised value: $270,000 x 80% = $216,000. Gap = $228,000 - $216,000 = $12,000 additional cash needed.
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