05.07.09 Change up: Your SELLER asks you: Can we tell them that this isn't contingent on appraisal? What happens if the appraisal doesn't come in at the contract price?

[Elaine Stucy]

Response?

[Steven Ross]

Let me ask you: If YOU were the BUYER - remember, you are now the buyer in this very uncertain market - and the Seller asks YOU to waive the appraisal contingency, what would you do?

Under any circumstance or condition would you accept the Seller's request?
no, blah blah.......

There you go.

[jefflemen]

If you were a buyer, would you willingly waive your appraisal contingency?
What happens if the appraisal doesn't come in?...let me ask you, what do you think will happen?
What are you prepared to do if the appraisal doesn't come in?
Do you absolutely need to sell your home?

[john steiner]

I think it is waiving a huge red flag. What would you do if a seller denied you your Appraisal contingency? Appraisal is a nasty reality we are all having to deal with. We need to ask ourselves what we are going to be prepared to do if confronted with a negative appraisal. We may have to adjust on our price. We can offer the buyer a small second loan to cover the shortfall. We can side step the issue and let the buyer deal with the difference. In the end it will depend on what you think you can get away with versus how much you may want to keep this buyer in the deal.

[Donald McVicar]

I understand, but it is common practice that all transactions are contingent on the appraisal.

If it doesn't come in at the contract price, I will provide the appraiser all supporting comps to assist in understading the value. Ultimately, it will be up to the appraiser and the bank.

Or, shall we price it so we won't encounter this obstacle??

[Yancy Whittaker]

Only if both the buyer and seller agreed in writing that the purchase agreement is not contingent on the appraisal being less than the purchase price...

If that were the case... and the appraisal comes in at any value say $230k below our specified purchase price of $250K then buyer should beware... for the buyer is then bound to pay the difference which is $20K.

However, it is not the case...in which case, we would be faced with the scenario of choices we discussed yesterday, remember???... Do you understand the difference???...so if the appraisal value comes in less than our agreed purchase price and the bank will not fund the purchase price but will fund an appraisal value less than the purchase price and I'm unsuccessful negotiating the buyer to pay in more cash to close, will you be open to reducing our purchase price in order to keep this deal from disintegrating and get sold???

[Amy Nelson Frelinger]

If you were the buyer, what would you think of a seller who wanted no appraisal contingency?
Would it make you confident about the value of the home?
If the appraisal doesn't come in at value, what will you do, Mr./Mrs. Seller?

[Gary Price]

In today's market a buyer is unlikely to do this. They are fearful of overpaying, many think that prices are still coming down in price. I believe that it would send out a red flag warning to the potential buyers.

If you were in the buyer's shoes would you waive this contingency?

What are you prepared to do if the property doesn't appraise at the contract price?
Do you absolutely have to sell?
Are you willing to do whatever it takes to keep this deal together?

[Betty Comegys]

Mr. Seller, what would you do if you received a counter from the seller and the appraisal contingency was excluded from the counter offer?

I haven't considered that
.
Do you think a buyer is going to buy or a bank is going to lend money without an appraisal?

Probably not.

What if the property doesn't appraise, what will you do?

What are my options?

There are several. You can adjust your price to get it sold. The buyer might be able to put up more money, but in this market, that will depend on the strength of the buyer. You might be able to split it with the buyer. What if adjusting the price is the only way to sell the property, what will you do?

Depends on how much the difference is in the appraisal and the contract price.

What if the only way to sell the property is to adjust the contract price to the appraisal price, what will you do?

I would not want to sell, but this is the only offer I have had in the entire time it has been on the market. I suppose I would reduce the price and sell the property.

Do you want to take away the appraisal contingency?

No, I suppose not. It is going to come up again anyway, isn't it?

Absolutely.

Okay, let's see what happens.

[Craig Ratowsky]

sure you can - i wouldn't advise it for the following reason - in this current marketplace most buyers are not going to be willing to purchase a property if it doesn't appraise - they are already concerned that they are making an offer on a property that may decrease in value over the next few months - if the appraisal doesn't come in at the contract price, you have some choices:

1 - accept the appraised value and lower your price
2 - try and negotiate with the buyer and see if they are willing to pay any difference between the contract price and the appraisal with you
3 - ask the buyer to bring any difference into escrow to close the deal
4 - don't sell it to them and put the property back onto the market
those are your choices, which one are you most comfortable with ?

[Michelle Nissani]

Well this really speaks to how you think we are pricing the home!

We could avoid this issue by pricing the home 5-10% below the most recent comp in the area and generate a multiple offer situation.

If we end up with a few offers in the same ball park, which is a typical result of this kind of pricing strategy, these offers can be presented to the appraiser and will show very effectively what the market is saying the value is.

The other advantage of this pricing stratgfy is you will sell quickly saving loss in equity due to a declining market and you as you sew frkm these statistics in the area you will get a 10% higher price per sq ft than the average home sale in the area. It's a win win.

Are you prepared to take this approvh to selling your home?

Are you prepared to work with this pricing strategy?

[Michelle Nissani]

Sorry for all spell areas, taking a quick break at the doors and typing on phone.

[Michelle Nissani]

I was interpreting this a question at the kiting, however after reading other replys we are looking at having an offer on table, in this case I soul go this route.

So you think we have got a good price for your home?

Yes but I am also worried about the bank situation

I understand, if you ask the buyer to remove the appraisal contingency, do you think thebuyers would hve the same concern?

Yes,

So they may back out and not go into escrow with you, and this would be based on a fear you have that may or may not happen.

Are you prepared to risk that happening?

No bit I don't want them to back out if it doesn't appraise.

Well first we have to get them into escrow, if the appraisal doesn't come in where we new it to, we can ask buyer to pay the difference, but most likely the buyers will want you to make up the short fall as no buyer wants to pay in excess of what an appraiser evaluates a property for.

Would you be prepared to do that to make the sale happens.

Well it depends on what the shortfall is.

What do you anticipate it being?

Who knows, what do you think?

I think we have a good price for your home and several sales in the area are 10% lower than yours, however there were no exact comps foe your home so of is tough to say. Would you be prepared to contribute 10% if absolutely necessary to close the sale?

Yes/no