What is an appraisal contingency waiver?

An appraisal contingency waiver is a clause in a real estate contract that allows the buyer to waive the appraisal contingency portion of the contract. This means that the buyer agrees to purchase the property at the agreed-upon price, regardless of the appraised value.

An appraisal contingency is a clause in a real estate contract that states the buyer has the option to back out of the contract if the property does not appraise for the agreed-upon purchase price. This contingency is put in place to protect the buyer from overpaying for a property.

What are some common questions about appraisal contingency waivers?

1. Do I have to get an appraisal?

Yes, most lenders require an appraisal to assess the value of the property before approving a mortgage loan.

2. Why would a buyer consider waiving the appraisal contingency?

A buyer may consider waiving the appraisal contingency to make their offer more competitive in a multiple offer situation.

3. What are the risks of waiving the appraisal contingency?

The main risk of waiving the appraisal contingency is that the property may not appraise for the agreed-upon price, and the buyer may be responsible for covering the difference in cash.

4. Can an appraisal contingency waiver benefit the seller?

Yes, an appraisal contingency waiver can benefit the seller by providing them with more certainty that the deal will close without any issues related to the appraisal.

5. How can a buyer protect themselves when waiving the appraisal contingency?

A buyer can protect themselves by having a thorough understanding of the market value of the property and ensuring they have the financial means to cover any shortfall in the appraised value.

6. Can a seller request an appraisal contingency waiver?

Yes, a seller can request an appraisal contingency waiver as part of the negotiation process.

7. Are there any alternatives to waiving the appraisal contingency?

One alternative to waiving the appraisal contingency is negotiating with the seller to reduce the purchase price if the property does not appraise for the agreed-upon amount.

8. Can a buyer waive the appraisal contingency after the contract is signed?

In most cases, a buyer cannot waive the appraisal contingency after the contract is signed without the agreement of the seller.

9. How common are appraisal contingency waivers?

Appraisal contingency waivers are becoming more common in competitive real estate markets where buyers are looking for ways to make their offers stand out.

10. How does waiving the appraisal contingency affect the financing process?

Waiving the appraisal contingency can streamline the financing process by removing one potential hurdle to closing the deal.

11. Can a buyer still request repairs if they waive the appraisal contingency?

Yes, a buyer can still request repairs as part of the negotiation process even if they waive the appraisal contingency.

12. What should buyers consider before waiving the appraisal contingency?

Buyers should carefully consider the risks and benefits of waiving the appraisal contingency and consult with their real estate agent or attorney before making a decision.

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