Episode 083 - Appraisal Gap Contract Language
With increasing markets come a slew of negotiating tactics by buyers. One of the most talked about is the “appraisal gap” language that many buyers are adding to their offers to ease the concern of sellers over the appraisal valuation. Does that affect the appraised value though? What does an appraiser do with that information? Brian gives his take on this topic.
SHOW NOTES
- 03:10 – What is an appraisal gap?
- 05:00 – Appraisal gap language should not affect the appraised value.
- 06:20 – The market value of the property is indifferent to the contract. The contract or its terms does not have any impact on the market value of the property.
- 06:55 – Does the appraiser feel comfortable writing a “low” appraisal because they know the buyer will make up the difference? NO!
- 08:45 – The contract does not automatically set market value.
- 09:20 – Transparency in Brian’s appraisals and appraisal gap contract language.
- 10:40 – Buyers have communicated their contract was above market value. Have the conversation with parties.
- 11:55 – Appraisal gap language is fine in a contract, but don’t automatically assume the value of the property is based upon that language.
- 12:30 – Buyer can pay more for a property than what it is worth.
- 14:00 – Appraisers: Do not assume the contract means anything. Do your job, analyze the information, and estimate the market value.
SHOW LINKS
BETWEEN THE LINES LINKS
Email
brian@brianclee.com
Web
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Facebook
https://www.facebook.com/groups/realestatebetweenthelines/
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YouTube
https://www.youtube.com/channel/UCcv4dHU39-b5_QVVCIhbcBA?
