TIP #2 – Allow 30 days for both your financing and appraisal contingencies
— AND —
Tip #3 – CONTACT YOUR LENDER the same day you get an accepted offer.
I can’t tell you how many times we get the call from a buyer saying, “We just passed our inspection contingency. So now we want to get going on the financing.”
Great! But we’re already 9 days into the 30-day financing contingency.
21 days is a tight turnaround. Is it possible to do? You bet. But what if there are complications on the appraisal?
- The lender contacts the appraisal management firm, who then…
- Puts out the work order to their qualified local appraisers out in the field.
- Appraiser accepts the assignment and contacts the listing agent, who…
- Contacts the seller to confirm the date and time of the appraisal.
Depending on how quickly everyone connects in that food chain, it could take a week or more to get the appraiser into the house.
With the standard Wisconsin Appraisal contingency language, the Buyer only has the right to cancel the transaction based on a low appraised value up until the date specified. It does not give the buyer the right to negotiate or obligate the seller to negotiate.
After that date, the buyer loses the right to cry, “Low appraisal! I’m out of here.”
And what if the Seller has a back up offer or you were in a bidding war with 4 other offers? All the Seller has to do is run out the clock. They do not have to respond to any Amendments you propose to lower the price based on a low appraisal.
As the Buyer, allow enough time to negotiate with the Seller if the appraisal comes in low (if that’s what you want to do). But you could really be under the gun if it’s Day 28 of your 30-day appraisal contingency.
The lesson again? Don’t wait. Get everyone (lender, appraiser, inspector, etc…) working on your deal as soon as it becomes real.
See our complete list of tips on writing an offer to purchase to learn more.