Final answer:
The difficulty arises when a home appraisal is lower than the sale price, a situation that became prevalent during the early 2000s housing bubble. Imperfect information can lead to a disparity between perceived value and actual market value, complicating the agreement between buyers and sellers. Negotiations or altering financial plans are potential solutions.
Step-by-step explanation:
When buyers and sellers encounter a situation where the appraisal comes in lower than the agreed-upon sale price, it can lead to difficulty in closing the deal. This scenario is reminiscent of the housing bubble in the early 2000s in the United States, where many homeowners found themselves with loans that suddenly became more expensive due to adjustable-rate mortgages and homes that were valued less than the amount owed. Imperfect information plays a significant role in these situations, as it can lead to a disconnect between the perceived value of a property and its actual market value determined by an appraisal. In the context of the student's question, if a buyer's agreed purchase price exceeds the appraised value and they are unable to afford the difference, they may need to negotiate with the seller, seek additional financing, or potentially walk away from the sale.