You had an appraisal done on the home you are purchasing. When all was said and done, the value came back at the contract price, or $1,000 above the contract price. Why?

When the market crashed years ago, appraisers took a large amount of the blame for things. There are several explanations for this, and I believe it's in large part because they had less representation in congress' ear when it came down to blaming appraisers, lenders, and Realtors.

This situation has put them in a tough position, and here's what they are looking at when submitting an appraisal today: 

1. If it appraises for the contract value which they have access to, or slightly above, the sale moves forward.

2. If they come in much higher they could run the risk of hitting problems in the future if the lender calls it into question.

3. If they come in too low there is a good chance there could be a dispute and it's going to take more of their time.

As you can see option #1 allows the sale to move forward and seems to have the least amount of resistance. While an appraisal will come in low if the value is in fact lower than the agreed upon price, if it does appraise if often comes in just 1K above the agreed upon price. It might not sound great, but the appraiser did their job, the lender is happy, and buyer and seller get to move forward.

Remember, the appraisal is done to protect the lender, and as long as it comes back at or above value usually the sale will proceed. The good news is the appraisal didn't come in too low, and you don't need to challenge it.