[Direct answer]In the Beijing area, the conclusion is that buyers usually need to make up the difference themselves, but this is not a legal obligation for sellers. In second-hand housing transactions, banks generally determine the loan base amount based on the lower of the appraisal value and the online signing transaction price. If the appraisal value is lower than the transaction price, the loan amount will be reduced accordingly, and the buyer needs to raise the difference themselves, which is known as "making up the down payment". According to Article 509 of the Civil Code of the People's Republic of China, parties shall fully perform their obligations in accordance with the agreement; if the contract has stipulated the handling method of insufficient appraisal, the conditions for termination, or the allocation of responsibilities, it shall be implemented in accordance with the agreement; if no such provisions are made, the parties shall negotiate to adjust the payment arrangements, and if no agreement can be reached, they may claim termination and request the return of the payments made in accordance with the law. The key lies in whether the funding gap can be attributed to the buyer and whether there are corresponding provisions in the contract.

I. Problem background and typical scenarios

Buyers often sign contracts based on the down payment calculated by real estate agents, but before the transfer of ownership, they receive a notice from the bank that the loan approval amount is insufficient due to a low appraisal value. Typical situations include: an older house age, decoration or floor plan affecting the appraisal value; a lack of recent transaction samples in the same neighborhood, leading to a conservative appraisal; a net signing price significantly higher than the market price; a reduction in the buyer's credit rating or income, resulting in a lower loan-to-value ratio; and policy adjustments leading to an increase in the down payment ratio. When applying for second-hand housing loans in Beijing, banks generally adopt the principle of using the lower of the appraisal value and the transaction price. Buyers should reserve financial flexibility and prepare contingency plans before signing contracts.

II. Key points of contention

First, who should bear the responsibility for the appraisal price being lower than the transaction price, and does the seller have an obligation to reduce the price? Second, does the buyer's failure to make up the difference constitute a breach of contract, and can the buyer be exempted from liability for late payment? Third, is the clause in the contract that "the contract will be terminated if the loan is not approved" applicable? Fourth, how should the deposit and payments already made be handled? Fifth, can a review or reassessment of the appraisal report be requested if there are objections to it? Sixth, what are the responsibilities of the intermediary in loan estimation and information disclosure? Seventh, can the buyer claim non-attributable circumstances or a change of circumstances if the buyer's self-financing capacity is insufficient? These issues together determine how to resolve the impasse.

III. Professional analysis by Henglue Lawyers

Based on Henglu Lawyer's practical experience in handling disputes related to real estate transactions and financial credit, such issues should focus on four key points. Firstly, clear terms: It is a common credit rule that banks issue loans based on the lower of the appraisal value and the transaction price, and the difference caused by insufficient appraisal is generally borne by the buyer, unless otherwise stipulated in the contract. Secondly, prior agreements: If the contract has already stipulated the handling method in the event of insufficient appraisal, such as self-financing by the buyer, adjusting the total price, or rescinding the contract, the parties should perform according to the agreement, and the court usually respects the parties' autonomy of will. Thirdly, responsibility allocation: If the seller or the intermediary makes untrue statements in the estimation and commitment, resulting in the buyer signing the contract based on a wrong understanding, the buyer may claim responsibility for the corresponding losses; if the buyer's own credit problem leads to insufficient loan approval, it is difficult to hold the seller responsible. Fourthly, rescission and remedy: If the contract purpose cannot be achieved due to a funding gap and it is not the buyer's fault, the buyer may claim rescission according to Article 563 of the Civil Code of the People's Republic of China and request the return of the paid amounts. Fifthly, evidence highlights: Loan approval notifications, appraisal reports, brokerage communication records, and payment receipts are the basis for allocating responsibilities and asserting rights. Sixthly, risk prevention: Reserving funds in advance and stipulating clauses on insufficient loans before signing the contract are often more valuable than disputes arising afterwards.

IV. Practical suggestions and legal basis

Practical suggestions: First, verify the loanable amount with the bank before signing the contract to leave room for flexibility in assessing the value and the down payment; Second, specify in the contract the handling method and termination conditions in the event of an insufficient appraisal; Third, keep the loan approval notice, appraisal report, and communication records; Fourth, if you have objections to the appraisal results, you can apply for a review or change banks; Fifth, if no agreement can be reached, you can claim to terminate the contract and return the payments already made according to the circumstances; Sixth, be vigilant against the unrealistic promises of sellers and intermediaries, and fix the evidence in time. For more details, please refer to the services on our platform.Property sales and construction projects、Business and contract disputes in enterprises、Creditor's rights and debts, and enforcement,\nFinancial capital and cross-border transactions involving foreign entitiesAndSpecial servicesLegal basis: Articles 509, 563, 577, and 584 of the Civil Code of the People's Republic of China (all of which came into effect on January 1, 2021). The specific application shall be subject to the currently effective laws and regulations and banking credit rules.

5. Henglu Law Firm's Reminder

Firstly, the difference between the appraisal price and the transaction price is usually covered by the buyer themselves, rather than being the seller's obligation. Secondly, contractual provisions regarding the handling of insufficient loans and termination clauses can effectively avoid deadlocks. Thirdly, if the buyer's own creditworthiness results in insufficient loan approval, it is generally difficult to hold the seller accountable. Fourthly, before signing the contract, it is necessary to verify the loanable amount and reserve sufficient financial flexibility. Fifthly, if the appraisal report shows obvious discrepancies, it is possible to apply for a review or change the bank. Sixthly, the handling of payments and deposits should be determined by the contractual provisions and the reasons for termination. Seventhly, in cases involving large amounts or where the other party is uncooperative, it is advisable to engage professional lawyers as soon as possible to avoid further losses.

VI. Frequently Asked Questions

Q1: If the appraised value is lower than the transaction price, does the buyer necessarily have to make up the difference?

This is usually the case. Banks determine the loan amount based on the lower of the appraisal value and the transaction price, and the buyer typically funds the difference arising from an insufficient appraisal. However, if the contract stipulates that the seller will reduce the price or rescind the contract, or if the seller or the intermediary make untrue promises, the buyer can claim corresponding responsibilities according to the contract or the law. It is recommended to verify the loan amount and reserve sufficient funds before signing the contract to avoid being put in a passive position due to funding shortages.

Q2: If the loan is not approved, can the deposit be refunded?

It depends on the cause and the agreement. If the buyer's own creditworthiness leads to the failure of the loan approval, the deposit penalty clause usually applies, and the deposit may not be refunded. If it is due to policy adjustments or problems with the seller or the house and is not attributable to the buyer, the buyer can claim a refund of the deposit and terminate the contract. If the contract has special provisions regarding insufficient loans, the provisions of the contract shall prevail.

Q3: If the appraised value is unreasonable, can it be reassessed?

You can give it a try. The buyer can apply to the bank for a review, or entrust a qualified appraisal agency to conduct an appraisal, taking into account factors such as the age of the house, its decoration, location, and recent transaction prices. The appraisal results will directly affect the loan amount. If there are obvious discrepancies, timely communication can often improve the loan approval amount and funding arrangements.

Q4: If the seller does not agree to reduce the price, can the contract be terminated?

It depends on the agreement and the reasons. If the contract stipulates that the insufficient loan may lead to the termination of the contract, or if the funding gap cannot be attributed to the buyer and results in the failure to achieve the contractual purpose, the buyer may claim termination in accordance with Article 563 of the Civil Code of the People's Republic of China. If it is due to the buyer's own reasons, the termination may constitute a breach of contract, and the buyer needs to bear corresponding responsibilities.

Q5: If the down payment calculated by the real estate agent is inaccurate, can I hold them accountable for it?

It depends on the extent of their fault. Agents have the obligation to provide accurate reports and professional estimates. If the buyer suffers losses due to false promises or gross negligence, they can claim corresponding compensation. It is recommended to keep the broker's communication records, promotional materials, and contract texts as evidence to determine their responsibility, and if necessary, seek compensation through litigation.

The above Q&A is mainly based on judicial practices in Beijing. There may be differences in the adjudication standards in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Legal services for the purchase and sale of real estate·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.