Are you currently in the process of buying a home? Have you experienced the seller asking you to remove the appraisal? If so, what market are you in? What are your thoughts on removing contingencies as part of the original offer?
Hm, interesting. My realtor said the finance contingency would kick in if the appraisal was lower, since the loan would not be approved. But this is sounding like that's not the case?
I believe that's actually true if you have an FHA loan vs. Conventional. The listing agent may ask for proof if you that you can no longer afford/qualify for the home.
I agree with you Jeb that it’s risky to waive the appraisal contingency. Laws and contracts vary by state but because of spike in demand we are experiencing here in Miami, appraisals are sometimes arriving after the due diligence period has expired and lender may not help you by giving you a denial letter when you clearly qualify, leaving you with few options (title, insurability, etc ) to get out of the contract.
Jeb Smith love your videos and recently subscribed. If you ever need a Realtor referral for the Miami/Miami Beach/Fort Lauderdale area please let me know. I’ll also let you know. I’ve been doing this for 17 years and once in a while I have people interested in the L.A. area including Studio City, Anaheim, etc. Thank you! .
Housing inventory is down people are overpaying for houses and sellers are getting over 10 offers on a house most offers accepted go to people who remove the appraisal contingency do you still agree with your own advice in July 2021 ? First time buyer here from Los Angeles -teacher and paramedic asking thank you
@Jeb Smith Hi Jeb, thanks for the detailed explanation. Question -- if mortgage contingency is already in place, could that still be used as the last protection? Say, appraisal contingency is dropped, then appraised value comes in too low, in this case, we tell the lender that we can't cover the gap, so lender won't approve the mortgage and we could back out with mortgage contingency?
So if sellers asks to remove contingency and the property appraised for less than offer price what does that mean for buyer they have to pay the seller the difference? And if yes how do they do that ?
If I'm putting 30% (270k) down payment on a 900k agreed upon sale price. But my appraisal comes in at 850k. Do I need to add another 50k to my down payment or does my large down payment cover the short fall in appraised value?
It depends...........there's a chance you can qualify without putting any additional down but if not then you may need to put a percentage the difference in addition to your 30%.
Hi Jeb, great vid, if you waive the appraisal contingency and the appraised value comes in lets say $25,000 lower than the purchase price would the buyers have to pay that cash? Im confused on that part- or does the bank lend it? what if the buyer don't have cash to make it up, thanks!
In theory, they would be responsible for the difference in the appraised value and the purchase price. The bank lends on the lower of the two. If the buyer doesn't have the cash to make it up then they shouldn't have waived the appraisal contingency. Hope that helps.
It's hard to say.......Typically if I have a multiple offer situation and the price gets bid up above what I believe it's worth, I show those offers to appraiser to help justify the price. At the end of the day, the appraiser is going to need to be able to provide comparables regardless of the type of market.
Then have that conversation with your agent.......Your realtor should have your best interest in mind, always. They may be providing insight which sounds like they are working more for the seller but in actuality they are just trying to get you to think how the seller may be thinking.
Hi Jeb .. good video ! Can we write on the buyers counter when asked to waive appraisal contingency a minimum sum the appraised value has to come in at . For Example . Purchase price cannot exceed 5000 dollars of appraised value ....meaning if appraisal comes in 5000 dollars or more , lower than purchase price , can we can back out or negotiate using this clause .
@@JebSmith Had I not signed an extension they would not have had time to get an appraisal. The last minute extension was a tactic. Shouldn't my realtor know this possibility and advised me of this possibility before signing extension?
Hi Jeb. I made such an offer per the advice of my broker, and as result of losing out on previous offers to all cash buyers. I really liked your video since it covered the other contingencies that allow me to back out of the contract.
@@JebSmith Hey Jeb, have you ever heard of a seller not taking the earnest deposit, and deciding to help out on the transaction? I really didn't mean to bluff. It's just that literally I bought the last house in this area and I kept hearing that you had to waive everything.
@@stefanie7588 It did! The house was listed at 370K, I knew I'd have to go 16K over that to get it so I offered 386K. The appraisal came in at 390K and since I made this comment Redfin is saying the house is worth 415K! The appraiser has the offer price here in MD so unless something is wrong you shouldn't have a problem.
Are you currently in the process of buying a home? Have you experienced the seller asking you to remove the appraisal? If so, what market are you in? What are your thoughts on removing contingencies as part of the original offer?
I'm in Boston and my buyer lost an offer due to appraisal contingency, we offer and highest price but couldnt waived the appraisal 😔
Lost 2 houses this way already
Thank you so Much for this info
Glad it was helpful!
Thank you I need a consult
Thanks you Jeb
Thank you, Jeb! It's good to know that there is a way out of the contract if there's a problem. Losing my good faith deposit is my biggest fear
Exactly..........The crazy thing is going in to the contract waiving contingencies upfront with the unknown of what could happen......Crazy
Hm, interesting. My realtor said the finance contingency would kick in if the appraisal was lower, since the loan would not be approved. But this is sounding like that's not the case?
I believe that's actually true if you have an FHA loan vs. Conventional. The listing agent may ask for proof if you that you can no longer afford/qualify for the home.
Thank you thank you... your video is very helpful and informative! Very to easy to understand. Thank you so much again!👍👍👍
Thank you.
I agree with you Jeb that it’s risky to waive the appraisal contingency. Laws and contracts vary by state but because of spike in demand we are experiencing here in Miami, appraisals are sometimes arriving after the due diligence period has expired and lender may not help you by giving you a denial letter when you clearly qualify, leaving you with few options (title, insurability, etc ) to get out of the contract.
Thanks Serge........I always love to know what's going on in other markets. Thanks for watching and the info.
Jeb Smith love your videos and recently subscribed. If you ever need a Realtor referral for the Miami/Miami Beach/Fort Lauderdale area please let me know. I’ll also let you know. I’ve been doing this for 17 years and once in a while I have people interested in the L.A. area including Studio City, Anaheim, etc. Thank you! .
Housing inventory is down people are overpaying for houses and sellers are getting over 10 offers on a house most offers accepted go to people who remove the appraisal contingency do you still agree with your own advice in July 2021 ? First time buyer here from Los Angeles
-teacher and paramedic asking thank you
It’s not a smart move but if you’re desperate for a house, sure go ahead and wave it 😄.
@Jeb Smith Hi Jeb, thanks for the detailed explanation. Question -- if mortgage contingency is already in place, could that still be used as the last protection? Say, appraisal contingency is dropped, then appraised value comes in too low, in this case, we tell the lender that we can't cover the gap, so lender won't approve the mortgage and we could back out with mortgage contingency?
So if sellers asks to remove contingency and the property appraised for less than offer price what does that mean for buyer they have to pay the seller the difference? And if yes how do they do that ?
Or they renegotiate the price........If appraisal comes in less then I would suggest trying to renegotiate before removing any contingencies.
If I'm putting 30% (270k) down payment on a 900k agreed upon sale price. But my appraisal comes in at 850k. Do I need to add another 50k to my down payment or does my large down payment cover the short fall in appraised value?
It depends...........there's a chance you can qualify without putting any additional down but if not then you may need to put a percentage the difference in addition to your 30%.
@@JebSmith as long as I keep my LTV under 80% I should be ok right?
@@rickyerika7106 I’m in your same situation. Can you tell me if you figured this out? Thanks
@@guillesaldana so my appraisal came in 15k short, but given I was putting down more then 20% down my lender was ok to fund and close.
Hi Jeb, great vid, if you waive the appraisal contingency and the appraised value comes in lets say $25,000 lower than the purchase price would the buyers have to pay that cash? Im confused on that part- or does the bank lend it? what if the buyer don't have cash to make it up, thanks!
In theory, they would be responsible for the difference in the appraised value and the purchase price. The bank lends on the lower of the two. If the buyer doesn't have the cash to make it up then they shouldn't have waived the appraisal contingency. Hope that helps.
Jeb Smith thank you!!
@@tarajooon8488 Don’t wave your appraisal and don’t pay $25,000 over what a house is worth. Just save your money and wait.
Thank you!
You're welcome!
Jeb being a seller and it’s a seller market. Getting multiple offers for an home. How would that effect the appraisal?
It's hard to say.......Typically if I have a multiple offer situation and the price gets bid up above what I believe it's worth, I show those offers to appraiser to help justify the price. At the end of the day, the appraiser is going to need to be able to provide comparables regardless of the type of market.
I am looking to buy. What if it feels like my agent is trying to please the seller more than me?
Then have that conversation with your agent.......Your realtor should have your best interest in mind, always. They may be providing insight which sounds like they are working more for the seller but in actuality they are just trying to get you to think how the seller may be thinking.
He is a seller and buyer agent, not just a buyer agent. Does it make a difference?
Hi Jeb .. good video ! Can we write on the buyers counter when asked to waive appraisal contingency a minimum sum the appraised value has to come in at . For Example . Purchase price cannot exceed 5000 dollars of appraised value ....meaning if appraisal comes in 5000 dollars or more , lower than purchase price , can we can back out or negotiate using this clause .
Sure.........that's definitely an option but the seller has to agree to it.
2021 no bubble popping here lol
Bubble popping? Where?
Someones using it against me to get out of the contract with deposit six weeks later.
Yes it happens..........Sorry.
@@JebSmith Had I not signed an extension they would not have had time to get an appraisal. The last minute extension was a tactic. Shouldn't my realtor know this possibility and advised me of this possibility before signing extension?
Hi Jeb. I made such an offer per the advice of my broker, and as result of losing out on previous offers to all cash buyers. I really liked your video since it covered the other contingencies that allow me to back out of the contract.
Awesome. Glad it helped
I screwed up... I hope the house appraises lol. 4k at stake.
Hahahaha, 🤞🏻
@@JebSmith Hey Jeb, have you ever heard of a seller not taking the earnest deposit, and deciding to help out on the transaction? I really didn't mean to bluff. It's just that literally I bought the last house in this area and I kept hearing that you had to waive everything.
Did it appraise? 👀
@@stefanie7588 It did! The house was listed at 370K, I knew I'd have to go 16K over that to get it so I offered 386K. The appraisal came in at 390K and since I made this comment Redfin is saying the house is worth 415K! The appraiser has the offer price here in MD so unless something is wrong you shouldn't have a problem.
Well done.
Thank you!
You're welcome!