Some consequences and implications of waiving an appraisal contingency on your offer to purchase a home.

In a hot market and/or in situations where home sellers have multiple offers on a home that are very similar in terms, to make offers more attractive to sellers, either they ask or buyers offer to shorten if not outright eliminate some contingencies that are often in sales contracts.  In several recent multiple bid situations, the sellers via their realtors countered my buyers' offers, proposing among other things that my buyers remove the appraisal contingency.  I explained to them what the implications of waiving the appraisal contingency is and thought it would be beneficial to share this with you.

As part of the loan process on either a new purchase or a refinance, the appraisal report is a professional appraiser's opinion on the value of a home, which is forwarded to the lender, who bases the loan on the appraised value of the home.  The lender is looking to see if the appraised value is equal to or above the sales price.  When the appraisal comes in at a lower value than the sales price of a home, the lender adjusts the loan amount to match the appraised value.  

When a sales contract has an appraisal contingency and the appraisal comes in lower than the price in the sales contract, the buyer has the right to try and negotiate with the seller to see if the seller will lower the sales price to the appraised value or to an otherwise agreed upon sales price.   

When a home seller asks the home buyer to not have an appraisal contingency, it means that independent of what the home appraises at, the sales price will stay the same.  If the appraisal comes in at less than the agreed upon sales price, then the buyer must come up with extra cash at settlement to bridge the gap between the appraised value and sales price.  Without an appraisal contingency, a low appraisal cannot be negotiated.  A buyer with a low down payment and/or not extra financial resources may want and/or need the appraisal to come in at the sales price.  

On the other hand , a home buyer may offer such a large down payment that he or she may not need the home to appraise, as the loan is not for the full sales price.  So he or she may not care what the home appraises for and is confident that the appraisal will come in high enough to cover their loan amount.  That being said, some buyers feel better with an appraisal contingency, that they aren't paying above a professional appraiser's opinion on the value of the home.

When refinancing a home one owns, a home owner needs his/her current home to appraise at or above the price the owner purchased the home for.

Financially speaking a lender may approve a buyer for a loan that is at or higher than the sales price of a home, but when the appraised value comes in at lower than the sales price, the loan will be based on the appraised value, independent of the buyer's financial ability.

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There are 3 situations where I might tell a buyer to perhaps consider waive the appraisal contingency:

1.  If the buyer is purchasing the home with cash.

2.  If the buyer intends to get a loan on the house, but has the financial ability to complete the purchase with cash and do a post settlement loan/refinance.

3.  If the buyer loves and need the home and/or its location, is planning on living in the home for such a long time that today's appraised value has little impact on the purchase, as the buyer has enough financial resources to complete the purchase just in case the appraisal comes in at a lower value than the contract price. 

Whenever a family member, friend or colleague tells you that he or she is thinking of moving, wants to talk about the real estate market or has a real estate question, please tell them that I would love to hear from them.  Either I can initiate the contact with them or they call/text/whatsapp me: (301)943-4370 or email me:  adambashein@gmail.com  - whatever is most comfortable for them..  I always have time for and appreciate your referrals, and am with my clients every step of the home buying/selling process.

Life is good!

Adam
adambashein@gmail.com
www.basheinhomes.info
Direct/Cell:  (301)943-4370
Office:  (301)921-4500 - ask for Adam
Licensed in MD & DC
RE/MAX Realty Group
information deemed to be accurate but not guaranteed

If you can afford to rent you can probably afford to own and we should meet

Great piece put together by one of my colleagues.

If  a family member, friend or colleague who is renting, he or she needs to get approved for a loan and meet with me to learn about the home buying process, what is brewing in the housing market and that there are probably homes for sale in their price range.  If they just want to keep on renting, then they are simply paying another person's mortgage.

Call:  (301)943-4370

Email:  adambashein@gmail.com

www.basheinhomes.info

Even if you know people who aren't in the market to move for a while but they are curious about the real estate market and/or have a real estate question, I would be delighted to meet and speak with them.  I always have time for and appreciate your referrals.

Life is good!

Adam

adambashein@gmail.com

www,basheinhomes.info

Cell/Direct:  (301)943-4370

Office:  (301)921-4500-ask for Adam

Licensed in MD & DC

RE/MAX Realty Group

information deemed to be accurate but not guaranteed

Should you worry if a seller says he/she will only accept your offer if you agree not to cancel the contract based on the home inspection?

http://realtytimes.com/consumeradvice/sellersadvice/item/1005578-20170928-dont-fight-the-home-inspection

Cell:  (301)943-4370

Email:  adambashein@gmail.com

www.basheinhomes.info

Every jurisdiction and situation is unique when it comes to home inspection contingencies in a sales contract. 

Here's one way to see it, home sellers. Buyers with general inspections/as is and also opting to walk away if unhappy with the inspection is intended to make offers more attractive, that sellers don't have to further budget for requests/repairs as a result of the inspection. Some buyers are ok saying as is and no backing out. A number of buyers want the option to back out just in case something big,unexpected and overwhelming comes up at the inspection.

I have seen some sellers (via their realtors) counter offers saying that buyers cannot void a contract based on a home inspection and must negotiate.  It is a way for sellers to make it harder for buyers to get out of contracts, telling the buyers that they may try to negotiate inspection items of concern with their sellers but they cannot just cancel the contract because they are unhappy with the report.
This is a strong negotiating move for sellers and it  could possibly turn off buyers, make them think twice about agreeing to a contract with sellers if they like but aren't in love with the house. Buyers who really love a house, are confident and experienced in making home repairs, improvements may more comfortable accepting a contract when they cannot back out on the home inspection contingency...particularly if they feel they are getting the home at a good price.  It can be a good move by a home seller when he or she has multiple offers on a home, trying to make 1 offer a lot more favorable to the sellers than the others, if the other offers are pretty similar.  If you are a buyer and don't think you are in a bidding war with other buyers on the house, I would not agree to this unless you are getting a real sweetheart of a deal on the home, no matter how confident and experienced you are in home repairs and improvements.

Whenever a family member, friend or colleague mentions to you that he or she is thinking of moving. please make sure to have them contact me for a free and confidential no hassle consultation.  I will take great care in representing their interests and making it a smooth move.  Even if they aren't looking to move but have a real estate question, I would love to speak with them.  I always have time for and greatly appreciate referrals.

Life is good!

Adam
adambashein@gmail.com
www.basheinhomes.info
Cell/Direct:  (301)943-4370
Office:  (301)921-4500 - ask for Adam
Licensed in MD & DC
RE/MAX Realty Group
information deemed to be accurate but not guaranteed

Another Testimonial!

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Email:  adambashein@gmail.com

www.basheinhomes.info

Buyer A.C:  "My husband and I cannot say enough good things about our experience with Adam as our realtor. From the get-go, Adam navigated us through the home buying process in a calm, relaxing, and clear manner. We are first-time home buyers, and the process seemed overwhelming, confusing, and downright scary. But Adam sat down with us and explained everything in such a clear and understanding way that it alleviated all of our fears. He is compassionate and friendly. He has been such a pleasure to work with. Throughout the whole process, any question or concern we had, Adam made himself readily available to answer. And thanks to Adam's immense help, we found our forever home! He made the process so smooth and, dare I say, easy. We could not have asked for a better realtor and will telling anyone who asks that if/when they need a realtor, Adam is the right man for the job."

If you know of anyone thinking of buying in the Maryland or Washington, DC, I am here to help through a smooth buying experience.  Even if they aren't in the market to buy and have some real estate questions,  I would love to talk with them.  I greatly appreciate and always have time for your referrals.

Life is good!

Adam
adambashein@gmail.com
www.basheinhomes.info
Direct/Cell:  (301)943-4370
Office:  (301)921-4500 - ask for Adam
Licensed in MD & DC
RE/MAX Realty Group
information deemed to be accurate but not guaranteed

How buyers can make the most out of time when their offer to purchase a home includes a contingency for reviewing association documents

Cell:  (301)943-4370

Email:  adambashein@gmail.com

www.basheinhomes.info

I want to start today's post by saying that it inspired by Ken Harney's recent article in the Saturday Real Estate Section of The Washington Post. He regularly has articles published in their Saturday Real Estate Section.  This article by Ken targets people who may purchase homes in communities that are governed by associations---they have a board and bylaws.   This is most often found in condominium, cooperative and Townhome communities.  There are also communities that have single homes with a homeowner's association, subject to community rules. 

Currently, the sales contract says that buyers have the right and entitlement to receive the association documents. So a seller cannot decline to give them to you.  A buyer must receive the documents no later than 10 business days after a contract is ratified (is fully signed in agreement of terms), otherwise a buyer can back out of the contract by giving the seller notice of voiding the contract prior to receiving the documents. However, make sure it is clear whether or not the sellers or buyers in your jurisdiction customarily pay for buyers to receive a copy of the documents or if this is something that needs to be negotiated in the offer. ask your realtor and or real estate attorney.

Once a home buyer's offer on a home gets accepted, he/she have to take care of a number of matters which may have contingency time periods by which they need to be completed and so buyers prioritize what needs to be accomplished when and if there are things they don't have to worry so much about.  One of the things that a number of buyers make less of a priority is the contingency related to review of association documents/condominium documents/h.o.a. documents (or however they may be called/referred to in your jurisdiction). These documents contain vital information, which a number of people are negligent about reviewing before the purchase is complete.  The question is whether the buyers overlook the documents because they are overwhelmed with everything else that needs to be taken care of during the contract period or they just can't image how 'serious' the documents might be and how they might impact the buyer's decision whether or not to go through with the home purchase.

As Ken points out in the article, the biggest challenge of the association documents is how you thick/dense they are and how short the contingency period is, considering how detailed the documents are and considering everything else you have to take care o during the contract period.

For Washington, DC, the contract states that currently, the review period for association documents is 3 business days --- this is for condominiums, coops and H.O.A.'s.  Business days are defined as M-F, excluding federal holidays.

For Maryland, the review period for association documents is currently 7 days for condominium documents, 3 business days for coop documents and 5 days for H.O.A. documents.

The GCAAR Sales Contract, which is often used in Montgomery County, MD and almost always in Washington, DC (there may be a few exceptions) currently defines days as calendar days, which would include every day, including the weekends and defines business days as Monday through Friday, excluding holidays.

THE MAR Sales Contract, used exclusively in Maryland, currently defines days as including the weekends and holidays, whether state, federal or religious.  It doesn't spell out business days, but one can talk with his or her real estate attorney,agent about that if the regular day contingency period doesn't work for him/her.

In his article, Ken suggests that if you think the contingency period for reviewing the association documents gives you enough time to actually review the documents, then you should consider slashing the number of days for the contingency period and write in a new number, proposing adding a few more days to the contingency, giving you a little more time for due diligence in reviewing the documents.  I think this is a wonderful idea, however, I would only caution against doing this if the home is fairly new to the market and the seller is expecting multiple offers on his/her home.  Altering something in the contract to give the buyer's 'an advantage' could make other buyers' offers look more attractive in a multiple offer situation.  If the home has been on the market for a little while and it seems like there are no other offers being presented, then I would consider asking the seller about additional time for reviewing the association documents.  Every real estate market is different and every jurisdiction has its rules, regulations.  So follow your real estate attorney and realtor's advise.  I defer to them.

Remember, any time you or someone you know is thinking about moving, has a real estate question or wants to talk about the market, I always have time for you referrals.  Thank you.

Life is good!

Adam

Licensed in MD & DC

adambashein@gmail.com

www.basheinhomes.info

Cell:  (301)943-4370

Office:  (301)921-4500

RE/MAX Realty Group

information deemed to be accurate but not guaranteed

Shortage of Appraisers and how to plan as both a buyer and a seller

Cell/Direct:  (301)943-4370

adambashein@gmail.com

www.basheinhomes.info

http://www.msn.com/en-us/money/realestate/massive-shortage-in-appraisers-causing-home-sales-delays/ar-BBwHkuC

Part of the sales contract includes the option of having an appraisal contingency. When getting ready to write or review an offer, depending on whether I am on the buying or selling side, I ask the lender how many days the appraisers he/she works realistically need to to complete this contingency to make sure it is in line with what is on the contract.

As you can see from reading this article, there is a shortage in appraisers which is often resulting in delays during a sales contract period so it is extra important for sellers to do as much upfront diligence on a buyer to make sure they are qualified financially to buy their home before accepting a contract as sellers should have it in the back of their minds that as a consequence of the shortage of appraisers, the contract period may take a longer time. 

http://www.msn.com/en-us/money/realestate/massive-shortage-in-appraisers-causing-home-sales-delays/ar-BBwHkuC

Some buyers try to wait until after the home inspection contingency is fulfilled before giving their lender the green light to order an appraisal but doing so can put the buyer behind the 8 ball on the contingency if it takes a long time to get the inspector out to the house and/or there are lots of back and forth between the buyers and sellers in negotiating inspection items. A domino impact is that the lender cannot give a financing commitment until the appraisal is complete and a delay in that could delay in settlement. And, if you delay settlement, you may have to pay to extend your lock-rate, though interest rates remain very low.

If timing is tight a buyer can always write an addendum asking the sellers to extend the appraisal contingency. The selling side must be agreeable and this may depend on how friendly or abrasive negotiations have been, how long the house has been on the market and how long it has been off the market under contract.

Sellers, my biggest piece of advice is that your agent should do as much diligence up front in reviewing each buyer's offer, talking with their lender and making sure that the buyer is strong financially before accepting an offer.  If the buyer is strong and has otherwise presented a contract that works for you as is or is negotiable,then I would keep it in the back of my mind that if the buyer needs to extend the appraisal contingency (which could also mean extending the financing contingency and the settlement date), I would agree unless the buyers are not being reasonable during the inspection period and you want to start fresh with a new possible buyer.

 In addition, before considering backing out of a contract, I would factor into this how many days your home was on the market before getting any offers, if the market is strong or weak for sellers.

Any time you or someone you know is contemplating a move or has a real estate question, please call me:  (301)943-4370 or send me a note to adambashein@gmail.com.  

I always have time for and greatly appreciate your referrals.


Life is good!

Adam
adambashein@gmail.com
www.basheinhomes.info

Cell/Direct:  (301)943-4370
Office:  (301)921-4500  - ask for Adam
RE/MAX Realty Group

Information deemed to be accurate but not guaranteed

Keep it simple when you are buying homeowners insurance

Cell:  (301)943-4370

adambashein@gmail.com

According to the GCAAR sales contract for Maryland and Washington, DC homes, within 1 week of a contract offer on a home being accepted, the home buyer must apply for homeowners insurance on the home, to make sure the home is insurable.  If the home isn't deemed to be insurable, then a buyer probably can only go through a home purchase with a loan...unless the property condition(s) are addressed and deemed to be satisfactory by the insurance company.

When you are in the process of buying a home and getting estimates for homeowners insurance, simply tell the insurance company that the property is fine.  If you start talking about the house, the inspection report...no matter how good the condition is, the insurance company may ask for a copy of the inspection report.  They may tell you that you have to make some repairs before settlement or within a certain time after the purchase is complete otherwise the insurance company may say the home isn't insurable and you won't be able to complete the home purchase.  At this point you will either have to make some calls and get another insurance company to approve you for a  home insurance policy or you will have to buy the home with cash.  

By the way, if you own a home without homeowners insurance, when it is time to move, you may only be able to sell the home to buyers who are paying cash.  So, keep it simple!  When applying for homeowners insurance and the person on the other line asks you about the house/condo/townhome, simply say the home is in fine condition or they may probe further into the house and make it harder for their company to insure the home.  For more information about home insurance, contact a homeowners insurance agent as this is obviously his/her field of expertise and ask a real estate attorney (if you are actually in the process of buying a home ask the settlement company)  for implications if during the home buying process there end up being challenges obtaining insurance.

Whenever you or someone you know is thinking of buying or selling, has a real estate question or wants to talk about the market please call or email me.  I would love to connect and always appreciate your referrals.

Life is good!

Adam Bashein
RE/MAX Realty Group

Licensed in MD &DC 

Cell:  (301)943-4370

Office:  (301)921-4500 - ask for Adam

adambashein@gmail.com

www.basheinhomes.info 

information deemed to be accurate, but not guaranteed

The Fall is a great time to buy or sell!

Cell:  (301)943-4370

adambashein@mris.com

www.basheinhomes.info

Below are several reasons why it is a good time to sell:

1.  Interest rates are still very low so your home.

2.  There is a lack of housing inventory

3.  Most potential buyers are back from their summer vacations and are in town, ready to
make a move if the right home comes up.

4.  While some buyers may have stopped looking because of the school year, there are buyers whose moves are more related to finding the right home and the right time is when the right
home comes on the market.  And, the right home can be your home, if your home shows well and is priced correctly.

5.  There are potential buyers who are renting and their leases are ending soon and/or they are renting month to month/on short term leases until the right home comes up.

6.  There are buyers who move for jobs throughout the year.

7.  The fall is a beautiful season, potential buyers appreciate curb appeal, front and back
yards, patios and decks.  It may be a hair cooler now than it was over the summer, so it might be an even more appealing and comfortable time for buyers to move.  

8.  Buyers whose moves aren't tied to a certain time of year are serious buyers and those are the buyers who you want to consider your home.

Even if you aren't certain about listing your home for sale right now, you should invite me over to take pictures of your home right now, while it is beautiful outside.  I'll get beautiful pictures of your home without the lawn, driveway, any part of the house covered with snow, The pictures will be dark, as opposed to gloomy.  You sometimes don't get a second chance to make
a good impression with buyers.  We want your home to show well.

Here are several reasons why it is a great idea to buy in the fall:

1.  Interest rates are still at an historic low and who knows what the interest rates will be in 

the spring.

2.  Your monthly mortgage may be less than what your monthly rent is/could be -- I can refer you to a lender to get you approved for a loan.

3.  You may be competing with less buyers for a home than you were over the summer, as some people time their moves around the school year and school is back in session.

 

4.  You can fully appreciate and see the outside of the home, the yard, patios and decks.   

5.  The sun still sets pretty late each day so you can really take a good look at homes.

 6. If you buy in the fall, you can be in your new home for the holidays

7.  Any homeowner who has their home on the market during the fall season is serious about moving and so their move isn't tied to the school year.  You and a seller could be a perfect fit for each other.  

8.  A seller whose home was on the market during the spring and or summer, didn't get sold results and is still on the market as we enter the fall, may be more open to negotiations if the home seems like a fit for you.

9.  Each month you continue to rent, you are paying somebody else's mortgage instead of building equity.

Whether you or someone you know is thinking of buying or selling their home, has a real estate
question or is just curious about t the market is doing, I would be delighted to meet and speak.  I am here to help make your potential moves smooth.  Whenever the time is right for you and yours, I would be delighted to speak.



 I am always thankful and available for your kind referrals.


Life is good!

Adam
Licensed in MD & DC
adambashein@mris.com
www.basheinhomes.info
Cell:  (301)943-4370
Office:  (301)469-4700 - ask for Adam
Long & Foster Real Estate, Inc.
information deemed to be accurate but not guaranteed.

Testimonial from person who just purchased a home in Chevy Chase, MD

Cell:  (301)943-4370 Email:  adambashein@mris.com www.basheinhomes.info The best compliments I receive from people are using my services, referring me to others and writing testimonials.  This buyer moved in from out of town and asked her friends, who I sold a home to, to recommend a realtor.  I am flattered. Hi Adam,  I wrote this recommendation of your work that you can include on your profile.  Thanks,  Elana "We recently worked with Adam to find our home in Montgomery County. Adam was patient as we looked for a place that was the right fit for us, helpful in explaining the Maryland real estate scene and processes, and thorough and diligent in moving things forward once we were ready to make an offer.  It was great to celebrate with him at the settlement - he kindly brought bagels and made it a fun experience!"

Feb 12, 2015 Whenever a friend or family member of yours says that they are considering relocating or has a real estate question, your first move should be giving them my contact information and promising that I will take care great of them.  I always have time and greatly appreciate referrals. Life is good! Adam Licensed in MD & DC adambashein@mris.com www.basheinhomes.info Cell:  (301)943-4370 Office: (301)469-4700 - ask for Adam Long & Foster Real Estate, Inc. information deemed to be accurate but not guaranteed

Buy while the asking price for rental properties is going down!

Call:  (301)943-4370

Email:  adambashein@mris.com

www.basheinhomes.info

 

 

 

 

 

 

 

An interesting observation and discussion at this morning's office meeting. 

Agents have been noticing more price reductions lately in rental properties.  It could be that the properties are overpriced; it could be a property condition issue; it could be that it isn't prime rental season though people move all the time for a variety of reasons and it could have something to do with the low interest rates.  Have you seen the rates lately, over the last couple of years compared with the early to mid 2000's?!  Some investors are worried that would-be renters are tempted and/or able to buy homes with the great interest rates. 

Have you ever noticed that the higher interest rates are, the higher the asking prices tend to be for rentals? 
While there are situations when one cannot buy, shouldn't you get ahead of the game and buy now with low rates?

If you don't, you could be somebody who keeps investors happy because when rates hit a certain point, the monthly payments might not be where you are comfortable and/or able to make a purchase.  The only good renter is mine :-).

If you or someone you know is thinking about relocating, whether it is buying or selling, he/she wants to talk about the market and/or has a real estate question, contact me today. I always have time for and really appreciate support, interest and referrals.

Life is good!

Adam Bashein
Licensed in MD & DC
adambashein@mris.com
Cell:  (301)943-4370
Office:  (301)469-4700 - ask for Adam
Long & Foster Real Estate, Inc.
information deemed to be accurate but not guaranteed

 

Here's a way to find me, begin the home sale or home buying process

When listing your home for sale with me,your home could be featured when buyers go by your home and click on the QR code.

Life is good!

Adam Bashein
Call: (301)943-4370
0. (301)718-4100
adambashein@mris.com
www.basheinhomes.info
Weichert Realtors
Licensed in Md & DC