Home Must Appraise At Or Above Contract Price

[FMV]

What comment of any can we place in the report when these agents place this comment in the contract? We completely understand it is to protect the buyer/seller... blah, blah, blah.. but it looks like requesting a "pre-determined value" to me..
Anyone have any rebuttal commentary for statements like this on a contract?

 

[RSW]

I don't let the contract influence my opinion of value one way or the other. You could report the terms of the contract in your analysis of the contract.

 

[Pittsburgh Pete]

Fairly common in sales contracts. Has nothing to do with your job which is to appraise to market value. No need for rebuttal and it most certainly is not a request for a predetermined value.

 

[FMV]

Thank you for the feedback.. but I don't let it influence me, i've had in the past requested for the AMC/lender to go back and have the agents re-word it, which they have done-but this AMC was too lazy to have that done this time. it is just very frustrating to see it as it can be "construed" as requesting a predetermined number.

 

[hastalavista]

Quick advice: Ignore it and never demand buyer/seller to change their contract.

 

[Peter LeQuire]

That "escape" clause simply allows the prospective buyer to renegotiate the price or walk: they're common, commonly used to protect a buyer who is seeking something less than maximum financing, and are simpler to write into a sales agreement that specifying loan terms. Generally, the price is renegotiated if the appraisal doesn't meet the price.

It's the "contract bull's eye" - providing the contract to an appraiser, it is argued, a not so subtle way of influencing her to not mess up the sale.

 

[J Grant]

It's a clause in the contract to protect the buyer in getting their deposit back. You can comment on it being present if you feel doing so is relevant, but it has nothing to do with you reaching or not reaching a pre determined value.

 

[CANative]

Thank you for the feedback.. but I don't let it influence me, i've had in the past requested for the AMC/lender to go back and have the agents re-word it, which they have done-but this AMC was too lazy to have that done this time. it is just very frustrating to see it as it can be "construed" as requesting a predetermined number.

What the heck is that all about? Appraisers don't tell buyers and sellers and real estate agents how to write a purchase contract.

You appraise the real estate. Not the contract.

 

[Last minute lenny]

I usually put the following in the contract section when I see this " the contract is contingent on the appraisal being at or above the contract sales price. The purpose of this appraisal is to determine the market value of the subject property and not to substantiate a contract sales price" or something to that effect

 

[Vermonter]

Standard appraisal contingency in just about every contract I've seen. Even has a check box yes or no. Allows the buyer out of the contract if the appraisal doesn't jive with the contract price. Many buyers use it as a negotiation tool. Offer at list to get the property on deposit and then wait for the appraisal to negotiate a price. It was very common when the market was hot.

I make note of it when reading the contract, but never mention it nor have I ever been asked to.