Austin McKenzie, Who you work with matters.

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Rainmaker
1,056,098
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Any seller who would accept a contract that forces them to accept the appraised price as the contract price if lower than the original offer price is receiving poor advice from their agent.

Mar 04, 2022 11:37 AM
Rainmaker
1,071,686
Doug Dawes
Keller Williams Realty Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Have a lawyer wordsmith clauses ike that

Mar 04, 2022 11:27 AM
Rainmaker
1,440,061
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

As to what wording to use, make sure you're in a state where you're allowed to make those changes.  Beyond that, I'd consult your Broker or real estate attorney.  I'm not an attorney nor am I legally able to give advice on contract wording.

Mar 04, 2022 02:40 PM
Ambassador
2,820,135
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate Brokered by Real - St. George, UT
St. George Utah Area Residential Sales Agent

If the appraisal comes in low, the seller can cancel the contract because there is no obligation in agreeing to the lower amount. In this market, the buyer will most likely need to come up in price.

Mar 04, 2022 11:07 AM
Ambassador
3,176,035
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Get legal advice on this.  Word crafting can be dangerous in the wrong hands. Make sure what you do passes the test of one with a license to practice law. 

Mar 04, 2022 06:59 PM
Ambassador
5,832,008
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Our contracts are rather rigid in this area, editing this clause may require the brokers or buyers attny to provide the verbage they want.

Mar 04, 2022 05:44 PM
Rainmaker
757,692
Brian L. Sirota, Esq.
Bristar Realty (Realtor/Attorney) - Orange, CA
For Solutions: (714) 501-7660

 

Austin McKenzie 

 

A low appraisal does not excuse performance by the seller.   Only the buyer has the option of cancelling, provided the purchase contract has an appraisal contingency clause.

 

The argument you're looking to make is already built in.    With a low appraisal the buyer is within his rights to say, "lower the purchase price, or I'm exercising my 'out' under the appraisal contingency."

Mar 04, 2022 11:42 AM
Rainmaker
826,336
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

An attorney would have to do that for you. These days our appraisal contingencies state the buyer will pay the appraisal gap and won't walk away. Sellers here have so many offers that they wouldn't sign something saying they'll lower the price.

Mar 05, 2022 04:26 AM
Rainmaker
4,578,047
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Providing language like that would be considered practicing law here in NC. You can get an attorney to draft an appraisal gap addendum that suits  both buyer and seller.

Mar 05, 2022 06:45 AM
Rainmaker
5,405,659
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

In our market, if the Buyer doesn't agree to make up the difference, they won't win the bid.

Mar 05, 2022 06:09 AM
Rainmaker
2,701,365
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

The dynamic of the asking of taking three bids (appraisals) and seller accepting the lowest or the highest is standard wording for options to purchase in the future. One thing is made abundantly & unequivocally clear. There will be a sale subject to those bids/appraisals

Mar 04, 2022 03:04 PM
Rainmaker
987,361
Elyse Berman, PA
Best Connections Realty, Inc. - Boca Raton, FL
Boca Raton FL (561) 716-7824

I'd have an attorney write it.

Mar 05, 2022 03:51 PM
Rainmaker
709,129
Tony Lewis
Summit Real Estate Group - Valencia, CA
Summit Real Estate Group Valencia & Aliso Viejo

"Seller agrees to adjust the sale price to the appraised value should the appraisal come in below price offered"

Mar 05, 2022 03:15 PM
Rainer
359,967
Caroline Gerardo
Licensed in 20 states - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

What type of appraisal is being used? Florida Real Estate Appraisal Board and lender the buyer uses may intervene and not accept such a condition on the contract.     How can the seller know that the appraiser is certified, what if seller wants to contest the appraisal, what if seller has their own appraisal, what if the difference is ridiculously low because of error who is responsible ?     My solution: have the seller provide the non refundable credit card for the appraisal cost with rush fee, thus the buyer can walk, get the appraiser into subject on day four and deliver on day seven. A week and no money exposure protects YOU and your buyer.        Write the contract the seller pays the $1000 for SFR appraisal that lender chooses including rush fees.                                                                                                  If the seller is elderly, somehow frail, disadvantaged could they come back and blame you for forcing a low ball sale?                                                  People can agree or contract to do lots of things. In 30 years I've not had any legal disputes and I don't want to pay for them.    Low appraisals are a reality in this market.  Get an attorney and your broker's advice I am not an attorney but if the buyer is using FHA VA USDA this won't fly in Florida.  

Underlying message in your question is you believe the property won't appraise?

Mar 05, 2022 11:57 AM
Rainmaker
855,332
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

You need to check regarding wording with an attorney, but the seller is not likely to accept such a contingency. Might be worth a try, but seller would need to understand what they're signing.

Mar 05, 2022 08:13 AM
Rainmaker
1,776,492
Lyn Sims
Schaumburg, IL
Real Estate Agent Retired

That is how it is written in IL. Seller can walk, re-do the price, split within so many days after short appraisal. 

Be careful about writing your own contingencies because your not an attorney.

Mar 05, 2022 06:25 AM