Finance
In South Dakota, a property that will not appraise for the purchase price presents an issue because:
AThe lender will not allow the buyer to pay more than the appraised value
BThe lender typically limits the loan amount to a percentage of the appraised value or purchase price, whichever is lower✓ Correct
CThe appraisal sets the maximum legal price for a property
DSouth Dakota law requires all sales to be at appraised value
Explanation
Lenders use the lesser of the appraised value or purchase price to calculate the loan amount. If the property appraises below the purchase price, the buyer must either renegotiate the price, make up the difference in cash, or terminate the contract (if there is an appraisal contingency).
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