{ "media_type": "text", "post_content": "Unwise to offer no appraisal contingency? Going to offer above asking price on a house with multiple bids. Realtor suggested potentially foregoing appraisal contingency to show we’re committed to closing. We have a lot of cash but wouldn’t it be a red flag if the house doesn’t appraise for the full value? How risky is it if we’re only paying 10-15k above asking? Any other considerations? Thanks!", "post_id": "5f70400a6139c6002bfad0d1", "reply_count": 5, "vote_count": 2, "bowl_id": "5a5242b78e26290018502ca0", "bowl_name": "The Real Estate Bowl", "feed_type": "bowl" }

Unwise to offer no appraisal contingency? Going to offer above asking price on a house with multiple bids. Realtor suggested potentially foregoing appraisal contingency to show we’re committed to closing. We have a lot of cash but wouldn’t it be a red flag if the house doesn’t appraise for the full value? How risky is it if we’re only paying 10-15k above asking? Any other considerations? Thanks!

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It depends on the area. I know that in DC, forgoing the appraisal contingency is quite normal - maybe even expected by sellers - but less common in, say, Chicago. D1 highlighted the main question here: is your RE agent good? If they are able to clearly explain to you the downside risk of forgoing that contingency, the reason they assess the probability of seeing that downside as low, and have a number of experiences with this strategy that they can walk you through, I'd still do my own analysis but would be more inclined to trust their judgment. D1 also shared a really smart more when going above asking: use an escalation clause. It helps you avoid paying egregiously over asking if the next best offer was garbage. The savvy seller's agent will delay and stoke bidding wars to drive your number up, if they can, but if you're already in a multiple offer situation, that ship may have sailed. Consider using the top-of-budget figure as your cap for an escalation clause tho, so that your number looks flashy and you've really done the most that you care to in order to win the property. Don't get crazy though; this is just the beginning of your expenses.

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We offered without the appraisal contingency based on all the comparables in the area / neighborhood that had just sold. We offered the asking price with up to $15k escalation clause (above asking when needed to match another offer, in $2k increments). We also took away our option to negotiate price based on inspection (wed take it or leave it), and promised close in 30 days. We were nervous about all of it but it worked out for us. We trusted our realtor who knew the area very well & more than just the list of comparables.

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I think a house is worth what a buyer is willing to pay. If you’re happy getting the house at above asking, then the appraisal shouldn’t matter as long as you and your realtor have done your homework and are comfortable with the price paid.

Additionally when a house next door goes on the market they will use the price you paid as a comparison, not what your house appraised for. Same when you sell, buyers will see what you bought the house for not what it appraised for.

I lost 3 property deals because I didn’t have enough cash. Which costed me, in my third deal I went with the seller agent as my agent just to incentivize her more in a multi bid scenario. But still didn’t get it, the market is super hot. Go ahead with what the agent recommended.

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