Home Buyers, how can you get your home offer to stand out to the Seller and Sellers Agent? The key to increasing your odds of winning the bid, is to get into the consideration set to begin with.
If you’re bidding on an "A" property, An “A” Property, is a home that’s in near perfect condition, Buyers must anticipate that there will be competition. Multiple Buyers on “A” properties are still a reality in this current real estate market.
If you have the means to do it, (sideline cash) - sideline extra cash makes the GAP APPRAISAL CLAUSE an option for buyers to enhance the positioning in a multiple offer situation.
Most Seller’s are aware that month by month the market has pushed higher and most Sellers are concerned about the possibility of their property, in a financed deal, not appraising.
If the property falls short on appraised value this opens up the possibility that a deal could be canceled by the buyer because of the material change to the contract price.
Sellers love it when Buyers send offers with a GAP APPRAISAL CLAUSE attached. This limits the Sellers impact within a specific dollar amount range, where the buyer is contractually compelled to carry on with the deal within a specified range if the appraisal comes in under.
GAP APPRAISAL threshold ranges depend often on price point, it is very common to see in this market.
Read this excerpt here below that gives the exact language Joe Wiessner Realty™ uses in Appraisal Gap Guarantee negotiations:
Appraisal Gap Guarantee Clause
In the event the appraised value comes in below Purchase Price of ($300,000), then Buyer agrees to pay up to $10,000.00 over appraised value not to exceed purchase price. Any such cash differential shall be applied to Buyers` Balance of Purchase Price, (Paragraph 2 Line 48) of the Agreement of Sale.
The Buyer agrees that if this Gap Guarantee Clause is prompted, the Buyer will have Sufficient Assets as defined in (Paragraph 4, Lines 93-95) of the Agreement of Sale.
If the value established by the appraisal is less than $290,000 ($300,000 - $10,000), the parties may agree that the Buyer(s) may bring additional monies in order to pay for the difference, or the parties may agree to reduce the purchase price, or a combination of both. If the parties are unable to agree, then either party may terminate the contract. If the contract is terminated pursuant to this clause, all deposit monies paid by the Buyer(s) shall be returned to Buyer(s).
Bid It, to Win it!