Oddly enough nearly all people I talk to about this never gave it a thought. When asked if their attorney included such a contiengency there is almost always a long pause
followed by "no". I almost never see it in contracts. Of course the article assumes everybody involved in re is honest, knowledgeable, and has a brain (which we all know should not be assumed).
I can not remember the last time I saw this in a contract. I think that a lot of buyers think that if it does not appraise the deal is void. I just did a sale that the buyer was represented by a buyer broker and it did not have it in their contract.
Very often, however, this contingency is written to make the buyer feel rosey in my opinion. The reason I say this is because, should I happen to appraise a house for less than the purchase price--rather than renegotiate, the first thing one of the agent's will do is call my client and start the BASHING!!!
I'm sorry (not really) to keep harping on this issue, but everytime (I can remember) when I've appraised a home for less than the purchase price the agent comes unglued, and starts with the character assassination. I've even had lenders in the past not pay me for my appraisal when it came in lower than the sales price, and cease to order from that time on (agent called and yelled I was told). They just go find an appraiser who'll give them their number--doesn't matter if there's a contingency in the purchase and sale agreement!
I made Evangelist, I MADE EVANGELIST!!! I didn't even notice...the odometer clicked past 500 and there it is all stars (I can quite writing now!).
There in almost every one I see. It doesn't stop the agent from arguing, but it's in there. I wonder if a case could be made for malpractice (against the agent) if the appraisal came in low and there was no appraisal rider? Not that I would advocate that :twisted:
What I am seeing is contracts for big chunks of money as a down payment, and NO contingcies. My God, anyone smart enough to have $100,000.00 to put down on a $300,000.00 house would lead you to believe they would protect themselves. Tain't so. I am doing one now. My opinion is $270,000.00 and contract price is $311,000.00 and no contingcies. Geshhhhhhhh!
BTW, my area is Virginia Beach, Virginia. In northern Virginia the contingcies involve putting a first right of refusal in the contract that states that should a seller receive an offer higher than the signed and accepted contract, the buyer has 24 hours to meet the new price or their contract is void.