I recently received a cash offer on a higher end property in Buffalo Grove, and through several weeks of negotiation the seller accepted this offer based on no financial contingencies.
We even have an email from the selling agent stating what a great buyer this is as it is cash, no financing and there is value to that. We did get substantial earnest money as well. Of course I knew that the buyer was in fact getting a mortgage however this should not affect us and I was happy to meet the appraiser.
Little did I know that during the attorney’s approval there was a Silent Contingency put in this contract that the house must appraise at purchase price? I contacted the selling agent and the response was, “Of Course we always put that in.”
The lawyer for my client also stated that the buyer would have withdrawn from the offer if the bank did not get a chance to review the appraisal, so guess what? This is now a financing contingency even though the lawyer for the buyer stated that it was only the appraisal they were looking for, however now the buyer’s attorney said, “Oh No, the bank has to approve the appraisal.” Does this sound like a mortgage contingency to you?
My advice is that if you get a Cash Offer, you discuss this with the seller’s attorney upfront that, “This contract is not subject to the house appraising for purchase price” does not get added during the attorney approval. Also let the selling agent know that under no terms will this language be allowed to be added during the attorney’s approval.
If the buyers want to withdraw then so be it. Chances are they will not if they really want the house. Sellers do have rights as well and we need to make sure that this does not happen, as this is not the right way to do business when the selling agent presents a Cash Offer.
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