Which Contingency is Acceptable in This Market?

[Anonymous]

Selling our house and we got our first offer soon after listing. 30% below asking with appraisal, inspection and financing continencies.

If we can meet in the middle on price, I'd be comfortable accepting. I'm not too worried about the inspection but should I push back on appraisal or financing continency?

[Anonymous]

Depending on 1) how badly you need to sell; 2) how good is your competing offer.

[Anonymous]

Whoa 30% below asking

The market is changing

[Anonymous]

Did you knowingly list your house super high? Or it's quirky or something?

Look, I feel like as a buyer appraisal and inspection are the hardest contingencies to waive. Did you agent talk to their lender? Is there sufficient comfort they will be able to obtain financing? How do you feel about where the house will appraise? If you are working a 30% below list offer I'm surprised that doesn't make you super nervous.

[Anonymous]

Anonymous wrote:Did you knowingly list your house super high? Or it's quirky or something?

Look, I feel like as a buyer appraisal and inspection are the hardest contingencies to waive. Did you agent talk to their lender? Is there sufficient comfort they will be able to obtain financing? How do you feel about where the house will appraise? If you are working a 30% below list offer I'm surprised that doesn't make you super nervous.

Some buyers (especially professional flippers) come in fast with low balls. OP, if you priced fairly, do not sell for 30% under asking

[Anonymous]

OP here. I sincerely apologize but I need to amend my original post. The offer was actually 5% under asking not 30%.

[Anonymous]

Wow, where is your property, OP? 30% below asking is insane. Maybe I need to be bolder when making offers.

[Anonymous]

Anonymous wrote:OP here. I sincerely apologize but I need to amend my original post. The offer was actually 5% under asking not 30%.

How did you type 30 rather than 5???

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. I sincerely apologize but I need to amend my original post. The offer was actually 5% under asking not 30%.

How did you type 30 rather than 5???

What can I say, brain fart. Baby woke up several times last night so I'm kind of fried.

OP here - to answer questions, yes, we feel that our home is priced well. it's priced 5% less than what 2 other houses in our neighborhood have gone under contract for this month. The houses aren't exact equivalents (one main difference is walk out basement vs underground basement) but we've priced it to take that into account. We live in a very derisible neighborhood in MoCo and our house is in great shape and staged well. Sadly, though, only one offer so far.

[Anonymous]

I'm both a buyer and a seller right now, and I think it's going to be hard to get them to agree to the contract without the contingencies. Those are normal contingencies in a balanced market. They've just been waived the last couple of years because things went crazy. It's not usual in a regular market for those to be waived.

Also, as a buyer, the interest rate hikes are causing so much upheaval beyond just a higher mortgage payment. You should be locked in but what if something happens (like the mortgage company closing down, which is happening right now because of what the Fed is doing) and you have to apply with a different mortgage company. It's now at the higher rate you can't afford because the Fed jacked it .75 or 1 point since the last time you applied, just a few weeks ago. You need the fail-safe not to have to commit to bankruptcy just to buy a house. Same with appraisal contingencies...the appraisals should be close or at list price if the price is based on comps. Things haven't changed that much yet to significantly change comps. But what if there is a surprise and it appraises low? Where is the buyer going to get the cash? They can't sell investments because the value is so low right now, they'd lose a fortune having to cash some out. And I wouldn't buy a house without an inspection contingency.

So I think it's just gritting your teeth, accepting we're back to normal on contingencies and hoping nothing derails it. What you could do, if you'd rather rent the house for awhile than sell it lower than you are, is put something in there that if there is an appraisal contingency and it doesn't appraise, you have the option of cancelling the contract. That's what we would do as sellers if they want an appraisal contingency.

[Anonymous]

Re: appraisal contingency - you said you priced consistent with neighborhoods houses under contract - what about closed sales in the past 3-4 months? That's what is likely to drive the appraisal and understanding that will give you a sense of how risky the appraisal contingency is.

[Anonymous]

As a buyer right now, I won’t waive anything. Just too dangerous with this amount of flux happening. I’d just walk if seller tried to draw a line on that. Feels like prices are softening fast so feeling zero pressure to take any risks to get a house.

[Anonymous]

Anonymous wrote:Re: appraisal contingency - you said you priced consistent with neighborhoods houses under contract - what about closed sales in the past 3-4 months? That's what is likely to drive the appraisal and understanding that will give you a sense of how risky the appraisal contingency is.

OP here. Even the sales prior to the current ones would support out price, imo. I generally feel ok with the contingencies after thinking about it some. I think keeping them and just focusing on price is the best way to make the deal happen. My biggest concern is having this draw out and then the deal falls through but I guess that's the risk.

[Anonymous]

We just bought and waived no contingencies and in the current climate, I wouldn’t expect anyone to.

[Anonymous]

You can also counter and see how bad they want it.