Q. We are trying to get the first house we bought 2 years ago cashed out. We sold on L/O and did a contract when we put tenant in place (pre-Lou, again) for $169,900 (now in the $173k range with the anniversary increase). This, we knew, was at a slight premium to the area, but we also knew that it would be little while before she could cash us out. Now the mortgage broker/lender is saying that the house will not appraise for anywhere near this. He says that the most would be in the $155k range based on recent sales/listings. We don't want to lower the price nor do we want to take back a large second. Any input on how to approach getting this thing appraised for enough. Looking for the best way to handle this where, in the end, we get some cash in our pocket and are left holding a relatively small second if necessary. Bal. owed is:$138,900.

A. These situations come up from time to time. It is difficult to predict the market.

My first thought is - why is the broker/lender acting as an appraiser? You need to get a friendly appraiser that you can encourage to get a healthy appraisal.

If it actually does appraise for the lower amount you have three choices.

1. Sell it for the lower amount.

2. Sell it for the LO amount and take back a second mortgage for the difference between what you want and what the lender is willing to loan the buyers.

3. Tell your tenant/buyers you must have your LO sales amount and run the risk that they may move out and you will be forced to find another tenant/buyer and buy some time until the values go up. Your agreement allows you to do this.