Should buyers guarantee the appraisal?
What does this mean?
Guaranteeing the appraisal means flat out …The buyer is GUARANTEEING THE PURCHASE PRICE NO MATTER WHAT THE PROPERTY APPRAISES FOR. For example : If the contract price is $400,000 and the appraised value is $375,000, then the buyer is bringing $25,000 to closing to make up for the difference in the appraisal amount of $375,000 to the purchase price of $400,000.
You do not have to guarantee it in its entirety. You can “cap off” the amount that you’d like to guarantee. I’d like to explain this to you or show you in your next purchase contract.
Do you HAVE to guarantee or waive the appraisal?
No, you don’t have to do that either. Offers are still being accepted without waiving or guaranteeing the appraisal. However, offers made with either of these terms are viewed as very strong offers.
And, of course sellers are excited to receive offers without an appraisal contingency. One less hurdle for them to jump over. Thus, making it hard to reject an offer with either of these terms.
Waiving an appraisal can be done by the bank or by the buyer.
If the bank waives the appraisal it means an appraisal is not necessary- most likely they are satisfied by the “comps” provided by the appraiser (note: not the real estate agent) and therefore a physical appraisal is not necessary.
If a buyer waives the appraisal, with or without certain terms, it means the purchase price is secured by the buyer. They must have sufficient funds in addition to their closing costs and must be able to provide proof of these additional funds to the seller.
“Guaranteeing” the appraisal can only be done by the buyer as it’s a agreement to bring in money over the appraised value if the home under appraises.
When a buyer is guaranteeing or waiving an appraisal it could offset necessary funds needed to close. Therefore, I always advise my buyers to consult with their lender to confirm that they are financially sound/equipped to do this.
What is the seller thinking in the present market compared to the first half of 2021?
Sellers are thinking more steadily now than in the first half of the year. Sellers are considering whether or not there are “comps” to back up pricing. Prices have flattened out and we have enough comparable properties to stop the guessing game about appraisals and values. However, it is still a sellers market as inventory is low.
I put a true detailed analysis together for my sellers. I consider their needs, their desired time frame, where their next home is going to be and how I will get them into that home. I consider the market trend, the time of year, the expected traffic flow through their homes. I group all of that together with my knowledge and intelligent views drawn from my experience, and come up with a selling price to bring in viable, STRONG offers.
What makes your home stand out from the rest? What kind of seller do you want to be?
I’ll discuss these questions next!
Sellers are thinking more steadily now than in the first half of the year. Sellers are considering whether or not there are “comps” to back up pricing. Prices have flattened out and we have enough comparable properties to stop the guessing game about appraisals and values. However, it is still a sellers market as inventory is low.
I put a true detailed analysis together for my sellers. I consider their needs, their desired time frame, where their next home is going to be and how I will get them into that home. I consider the market trend, the time of year, the expected traffic flow through their homes. I group all of that together with my knowledge and intelligent views drawn from my experience, and come up with a selling price to bring in viable, STRONG offers.
What makes your home stand out from the rest? What kind of seller do you want to be?
I’ll discuss these questions next!
