Waive Your Appraisal Addendum to Strengthen Your Offer

Heres how waiving the appraisal addendum can strengthen your offer.

As a buyer, you can strengthen your offer tremendously in this market by waiving the appraisal addendum.

First, lets define the appraisal addendum. This addendum allows you to waive your right to cancel a contract if the property appraises for lower than the offered price. For example, lets say you and the seller enter into an agreement for you to purchase their property for 400,000. In the appraisal addendum, youll declare your intentions if the property appraises below 400,000. If you waive the appraisal and the property appraises for, say, 390,000, youre basically saying youll cover that 10,000 gap. If you dont waive the appraisal, what happens next is up for negotiation.

In this red-hot market, buyers are hardly giving any thought to price because theyre securing such low interest rates.

Essentially, waiving the appraisal gives you an advantage over other buyers because youre ensuring sellers that they dont need to worry about renegotiating in the event of a low appraisal. I normally wouldnt advise buyers to take on this strategy, but in a strong sellers market like this one where any home listed under 400,000 receives 15 to 20 offers the very first day, you need to make your offer as strong as possible.

In this red-hot market, buyers are hardly giving any thought to price because theyre securing such low interest rates (2.6%, 2.7%, etc.). The challenge is actually getting the contract, so getting a contract is akin to securing a deal. More and more buyers are waiving their appraisals, so youll have to compete in the appraisal world as well, just in case the offer comes in lower.

As always, if you have questions about this or any real estate topic or are thinking of buying or selling a home soon, dont hesitate to reach out to me. Im happy to help.