And the WINNER (?) IS.....NO Appraisal !

By
Real Estate Agent with EXP Realty 414-525-0563 57026-90 Broker

Thinventory is still a plague we see in many areas...lots of price ranges...different neighborhoods...there is such a lack of inventory...Sellers that get their homes and condos "all dressed up and No appraisalready to sell" are experiencing record profits while record prices are the order of the day. In days gone by...in some cases...both the Buyer and the Seller had a concern as to whether the record prices would appraise.

  With multiple offers on properties...Buyers and their agents look for the "leg up" that will win the property bidding war. Desperation takes many forms...no inspection...HUGE deposits of earnest money WITH the offer (in our market 3 days after acceptance is more common,) Short closing times when possible with no charge rent backs for the Sellers if necessary. 
   Danger Enter what we consider the most "dangerous"....the No Appraisal contingency offer.  Ahhh...a sigh of relief to a Seller who may have a little voice that is even suprised at the elevated/escalated numbers on the offer.  Make hay while the sun shines...the new "realty reality" can mean money in the bank....Sellers are clapping their hands and heels and dancing all the way to the bank.

    The Buyers...driven by the market,..heightened emotions reign .deep pockets...and the deepest pockets win...OR ....do they ?  Are memories short ?  Our memory is quite vivid when we had 36 short sales stacked up like cord wood...each with a minimum of two mortgages...divorcing spouses...lawyers who did not always agree....and "values" that were not as valuable as anyone wished that they were...and life happens...and real estate goes in cycles.

     This post is not to predict gloom and doom or a rash of short sales as we experienced not that many years ago...it is meant to be a caution....casting common sense to the wind...may not be the best decision for a buyer...Was the House priced to sell ? An extra five figures hmmm. How well we know the Buyers who are going to stay forever...who have stable jobs and marriages...and then...

      This has been a post that is meant to caution brought to you by Sally K. & David L. Hanson, Broker Associates with EXP Realty honored to be of service for all things real estate in southeastern Wisconsin.



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Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS


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Ambassador
3,046,153
Paul S. Henderson, REALTOR®, CRS
RE/MAX Northwest. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

I didn’t enjoy the last downturn and I pray the next one comes when I retire Sally K. & David L. Hanson 

May 20, 2019 08:50 PM #1
Ambassador
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Margaret Rome, Baltimore Maryland
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Sally K. & David L. Hanson  This is a post that is meant to caution...and it does. Buyers are in tough positions when there is thinventory.

May 20, 2019 09:45 PM #2
Rainmaker
1,835,579
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

This is something I have not heard of yet.  How can someone get a loan without an appraisal?

 

May 21, 2019 02:59 AM #3
Rainmaker
2,831,977
James Dray
Fathom Realty - Bentonville, AR
Exceptional Agents, Outstanding Results

Morning Sally.

Like Jay Markanich said, how can one get a loan without an appraisal?  Interesting, unless that is they are paying cash, even then I would want an appraisal.

May 21, 2019 03:20 AM #4
Rainmaker
3,192,377
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

People who pay cash...we had one buyer (we were the listing agents) who paid hundreds of thousands more than the appraised value) sometimes don't get appraisals. For folks getting a mortgage...they just have to make up the balance in cash to meet the price they offered Jay Markanich ....so it's starting off ...upside down...

May 21, 2019 04:21 AM #5
Rainmaker
5,270,325
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much for sharing your experience and advice.

May 21, 2019 05:22 AM #6
Rainmaker
3,173,491
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Sally. Waiving the appraisal contingency is not for the faintof heart. It can really bite the unprepared. Enjoy your day!

May 21, 2019 06:02 AM #7
Rainmaker
1,489,207
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Good morning Sally K. & David L. Hanson, regardless of the market conditions,  this is dangerous, however, some buyers don't mind overpaying for the home and know very well they're paying well above market value.

May 21, 2019 06:46 AM #8
Rainmaker
3,192,377
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

It is an emotionally driven decision Beth Atalay that you hope won't 
"bite them" later !

May 21, 2019 06:54 AM #9
Rainmaker
2,454,303
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I had buyers recently that opted to have the lender waive the appraisal, which I didn't realize a bank would be willing to do, but it happened.  They were happy that they saved $400, but I was thinking that they might have lost out on thousands of dollars if the home didn't appraise for the purchase price and I was able to negotiate a lower purchase price for them.  I didn't make a stink about it since another outcome could have been that the sellers would refuse to come down to the appraised price and my buyers would refuse to come out of pocket to make up the difference.

May 21, 2019 07:04 AM #10
Rainmaker
3,246,793
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Sally and David - an offer with an appraisal waiver may look good to a seller but it's just one piece of the puzzle.  Thankfully, you can guide and inform your sellers of the other missing pieces that can complete the "prize" everyone wants.  

May 21, 2019 09:00 AM #11
Rainmaker
3,526,795
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good afternoon Sally. This is thoughtful and well expressed. Never good to cast caution to the wind.

May 21, 2019 09:59 AM #12
Rainmaker
3,126,914
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Home and Condo Specialists

Yes Sally and David, that's the way it's done... they have to make up the balance to meet the price!

May 21, 2019 10:32 AM #13
Rainmaker
3,192,377
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Only the future will tell Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400 if  that was a wise choice !

May 21, 2019 10:38 AM #14
Ambassador
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Sally and David I agree with you, Buyers are starting to repeat some of the mistakes of the past.  But not to worry the greedy lenders will take the blame for it.

May 21, 2019 04:16 PM #15
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Rainmaker
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Sally K. & David L. Hanson

WI Realtors - Luxury - Divorce
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