Gainesville, FL · Member since 2013 · 127 posts · 21 votes
A potential buyer of a single family house has presented an offer based upon an FHA loan, which, of course, will involve a pretty stringent appraisal. Nevertheless, he has attached an "Appraisal Contingency" which allows him to hire another appraiser and present the appraisal to me, the seller, up to 7 days prior to closing. If the appraisal comes in low, he can walk away at that point. So he appears to be giving himself two chances to present me with a low appraisal. Would any seller who is not desperate to sell accept that? Am I missing something?
A potential buyer of a single family house has presented an offer based upon an FHA loan, which, of course, will involve a pretty stringent appraisal. Nevertheless, he has attached an "Appraisal Contingency" which allows him to hire another appraiser and present the appraisal to me, the seller, up to 7 days prior to closing. If the appraisal comes in low, he can walk away at that point. So he appears to be giving himself two chances to present me with a low appraisal. Would any seller who is not desperate to sell accept that? Am I missing something?
I would not agree to that term. The appraiser that FHA hires is independent and neutral. The appraiser that he hires could just understate value as a way to get out of the contract.
Definitely don't accept that in this market. The Lender's appraisal is all that matters. That is the most that you should allow. In many markets, people are waiving appraisals altogether, no reason to give him two appraisals to try and negotiate the price back down.
Gainesville, FL · Member since 2013 · 127 posts · 21 votes
5y
@Joe Splitrock, thank you. It's especially offputting that the second appraisal gives the buyer until 7 days before closing to back out. He set the closing date for six weeks from the effective date of the contract.