Mare, Home Buyer in Otay Ranch Village,...

is it wise to waive an appraisal contingency?

Asked by Mare, Otay Ranch Village, Chula Vista, CA Mon Aug 23, 2010

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9
It's not wise to remove an appraisal contingency. It's designed to protect you from an appraisal coming in lower than the agreed upon sales price and depending on your financing potential required repairs.

Alejandro R Puente
0 votes Thank Flag Link Fri Sep 17, 2010
Absolutely not, unless your are a cash buyer and dont care if the appraisal comes in a little low.
If you are a conventional, FHA or VA buyer the loan most likely will not go through.
0 votes Thank Flag Link Fri Sep 17, 2010
Sure if you do your homework or your Realtor does and you get a solid appraisal from a seasoned agent, then by all means go cash and waive the appraisal.
0 votes Thank Flag Link Mon Aug 23, 2010
In general is never good to remove any contingencies just for the sake of removing them.
Some seller's agent thinks that by asking you to do it, it will show how committed you are on buying the house.

Remember Contingencies were put in place for a reason "to Protect you, the buyer" so be firm and make sure your Realtor protects you from getting in to a bad situation.
0 votes Thank Flag Link Mon Aug 23, 2010
Not unless you're prepared to do ANY repair that needs addressing after taking possession. Investors will often submit offers with no contingencies, but they usually bring people to look at the house who can spot potential big ticket problems - and they typically have deeper pockets to be able to assume some risk. I would never advise a buyer to waive the appraisal contingency - that would be up to the buyer.

Ask yourself if you'd be able to tell if there were foundation problems, or the electrical was a hazard even if the outlets and wiring appeared to be OK? These are just a couple of issues that could arise after you moved in and pulled up the carpet, etc.

Good luck in your purchase!

Cory
0 votes Thank Flag Link Mon Aug 23, 2010
No. It's not wise.

It's as simple as that.
0 votes Thank Flag Link Mon Aug 23, 2010
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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In most of the transactions I have been involved with recently it seems like almost all of them had issues with the appraised value coming in short of the purchase price. In all these cases, had my buyers waived/removed their appraisal contingency, they could have easily lost their deposit or really would have been pushed around by the sellers.

In almost all of those cases, we were able to negotiate the purchase price down to the appraised value by leveraging our contingency removals.

As it was said below, it is not a black and white answer as every situation is unique and different, but in most cases, you should not remove your appraisal contingency unless you have the appraisal completed and know what you're working with.
0 votes Thank Flag Link Mon Aug 23, 2010
This is one of the biggest investments that you will ever make, especially in todays market it is not wise to waive an appraisal contingency,,,, for purposes of Mortgage, Insurance companies and so on...Has you agent or attorney advised on this very important matter. To protect yourself it is always best to complete all contingencies.
If you need any further assistance. Do not hesitate to ask
Best to you
0 votes Thank Flag Link Mon Aug 23, 2010
It depends on the house you're purchasing. Is it priced well or is it overpriced? Has your agent done a market analysis on the home to pinpoint what it is worth in today's market? And are you willing to bring in the extra money to the table if the appraised value fell short by 10,000, 20,000 or perhaps more? This really depends on your unique situation and it is not a black or white answer. But in general it is not wise to remove the contingency unless you're an all cash buyer.
0 votes Thank Flag Link Mon Aug 23, 2010
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