Tip #2 to Getting Your Offer Accepted in a Sellers Market!

Appraisal Waiver:           In a quickly appreciating market it is not uncommon to see Sellers asking Buyers to waive the appraisal contingency.  Should it make financial sense, you can offer this upfront to make your offer more desirable.  As the offer is currently written if an appraisal comes in below sales price there are three options:  1. Buyer does not have to buy.  2. Seller does not have to sell.  3. Buyer and Seller renegotiate by meeting in the middle, lowering the sales price or Buyer paying the total difference.  Here’s an example.  You purchase a home for $250,000.  The appraisal comes in at $225,000.  If you, the Buyer, has waived the appraisal condition than you would be paying the difference of $25,000.  If you did not waive the appraisal you could renegotiate with the Seller.  Often, if Buyers have the cash, they have the ability to waive the appraisal and pay the difference.  This can be VERY attractive to a Seller and helps Buyers who have some cash but are not in a position to pay all cash compete against cash Buyers.  Another way to use the appraisal to create a more attractive offer is to offer to pay a certain amount over appraisal, not to exceed the offered sales price.  For example: “Buyer agrees to pay $5,000 over appraisal not to exceed a sales price of $200,000 (This will be the price you offered.  Put a cap at the sales price so that in the instance the appraisal comes closer to sales price than you offered to pay over, you aren’t stuck paying more than you originally offered.)