The lender is really telling you that it will not write a mortgage for the amount you requested based upon what it believes the home is worth to them in a foreclosure. You do have options.
• You can apply with another lender. Be prepared to pay an additional loan application fee.
• You can increase your down payment so that the amount of the mortgage loan is lower.
• You can request that the lender obtain a second appraisal from another appraiser. You will pay for both appraisals.
• You can attempt to reason with the lender. Be prepared to show that list of comparable homes and their selling price, inspections that show no major defects, and you might want to obtain an independent appraisal on your own.
• You can find another home.
Appraising is an art rather than a science. There are few, if any, hard and fast rules about how much certain items are worth in a home.