Buyers Advisory Guide Many families are moving to Arizona from other states. Because of this, Arizona properties have become popular in recent months. As a result, some appraisals have come in lower than the agreed sale price.
Increased use of the Waive Contingency Clause
After all the extensive remodel that was done to the house and I will share more on that in another blog.
The house was beautiful and done and it offered more than other homes in the area. It’s a real estate term that is allowed if used properly. The real estate was a four-bedrooms and two-bathrooms home with no add-on. Very functional in these days and age. It had a pool, two-car garage located in a Cul de sac.
Well, that should have been my first clue that doing a For sale by owner might be different this time because there was no drive-by traffic at all. I held open houses for 2 months and listed the home on Zillow, Redfin, etc and even sent out Postcards to the neighborhood letting them know in case they had a friend or relative who wanted to move close by. I had “Home for Sale” signs “Open House signs with arrows” that I bought used on Offer Up and I could not drive much traffic to the realtor’s house.
Realtors called from my free listings on Redfin and Zillow
This is where it got fun and interesting. Remember at the time of my last fix and flip I was not a licensed Realtor. That’s very important because as a licensed Realtor the law says you must let everyone know that when making offers on homes or selling one. Having a Real Estate now can be a benefit to me selling my own homes I own in the future or not. future blog.
Buyers are using the Waive Contingency clause. This clause allows buyers to pay the difference between the appraisal and the sale price. In this way, they can still buy the home at the agreed sale price. Buyers, who choose to move to Arizona, are willing to pay extra not to lose their desired property.
Looking for just the right home can be exhausting and can take months. Buyers have taken the time and effort to find a home that fits their needs. These properties may even be their dream homes for the foreseeable future.
Lenders Role and their Concerns
Lenders find the practice of buyers using the Waive Contingency clause concerning. Lenders use the appraised value of the property to calculate the loan. Lenders can not loan as much of the sale price when the appraised value is lower than the sale price. This practice leaves a shortfall, and the buyer has to make up for the price difference. This shortfall could run into thousands of dollars the buyer has to pay over the appraised value.
Arizona Association of Realtors addressed the Situation
The Arizona Association of Realtors addressed the situation. As a result, they added a paragraph to the Arizona Real Estate Buyers Advisory Guide. The change is effective June 1, 2021. It reads as follows:
“(Anytime your going to Waive a contingency on the real estate) transaction that you should get advice from an attorney. Weather it’s the “Appraisal Contingency” or the “Finance” or “Buyer inspection period” you should consult an attorney.”
The Buyers Advisory Guide is a 13-page Resource for Real Estate Consumers. It is given to the consumer when they contact a Realtor about buying a property. It lists:
• Documents a buyer should review
• Conditions of the property a buyer should investigate
• The area around the property the buyer should check out
• Other methods of getting information about a property
• Buyer acknowledgment, which the buyer signs
Arizona Association of Realtors is there to help buyers as well as sellers. They want to help buyers buy their homes or other property. So, they make sure buyers have as much information as possible. For more info call me anytime 602 299-1743