Appraisal Addendum

In a seller’s market like this, it’s really common to see buyers willing to pay over appraised value as they’re tripping over themselves for the most prized properties. In these situations, for years now buyers and buyer agents have been looking for ways to formalize their creative offer structures that are attached to uncertain appraisal values. The lawyers that govern our process also did not like the fact that buyers, sellers, and real estate agents were all too close to “practicing law” as they wrote up these “if X happens then Y” type contingent offers…thus, the introduction of a new confusing form!

Here’s the addendum for reference: https://www.trec.texas.gov/forms/addendum-concerning-right-terminate-due-lenders-appraisal  

#1 is straightforward. You pay what your offer says, period. There are no outs. No ifs, ands, or buts about anything.

#2 and #3 say THE EXACT SAME THING. It’s just word play with negatives.

So lets say Sussy is in a bidding war over a prized house. Say the list price is 350k, and her real estate agent showed her comps to suggest it may appraise for about 360k. If Sussy tells her agent “I want to bid aggressively. I’m willing to pay 10k over appraised price, but no more than 370k total.” You can use this new form to express this offer two different ways. You can check box #2 and write $360,000 in the blank or you could check box #3 and put $360,000 in the blank. Both accomplish the same thing!