If you find a hot buy that is likely to have multiple offers, you will be confronting the uneasy choice of waiving the appraisal contingency in your offer.  It’s likely that the other buyers will do it too, so it’s become a part of the minimum package needed just to compete.

If the appraisal comes in below the sales price and you have a 20% down payment or less, you will be forced to make up the difference in cash (or pay mortgage insurance, if possible).

In an unfortunate frenzy effect, because the appraisal contingency has been waived, listing agents don’t show up to help substantiate the value to the appraiser.  It used to be one of the vital jobs of the seller’s agent to provide recent sales to the appraiser to ensure the appraisal came in at the sales price – so the sellers wouldn’t be faced with potentially having to lower the price to appease the buyers.

But these days, the listing agents couldn’t care less.

So now when we have the buyers, I meet the appraisers.  I want to make sure I do everything I can to persuade the appraiser to hit the sales price so my buyers don’t have to bring in more money.

I just had one where, two days before our appraisal appointment, a new listing of a model-match but inferior condo hit the open market priced at 10% UNDER our sales price in an obvious ploy to start a bidding war.  I already had a big challenge with the comps because there had not been a sale in the complex all year – and appraisers don’t like using sales from complexes that were 3-4 miles away.

But I convinced him, and the appraisal came in at our sales price!

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