Related Posts
How much money do you have saved up?😳
Best robo advisors for new investors?
Bowl Leader
More Posts
Bowl Leader
Finger Lickin' Good
For refferal in Deloitte USI, DM me!
Additional Posts in The Real Estate Bowl
Any thoughts on this book?
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
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.
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.
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.