My understanding is appraisals are almost always the lower of purchase price or appraisal. Is it ever possible to have a loan based on appraisal if the purchase price is far below the appraisal?
The property I have under contract is appraised at $3,300,000 (which is low) and the purchase price is $1,850,000, which represents about 56% of the appraised value and is $1,450,000 below the appraisal.
I’d like a better LTV than 70% of purchase because there is genuinely a large amount of equity in the project, but most of the financing institutions always do the lower of appraised value or purchase. I have no problem with conservative lending rules, but the intrinsic value is so much higher than the sales price that I would prefer a more aggressive LTV than I’m currently being offered.
Any suggestions would be helpful.