We have some hard deadlines now.
I will coordinate the Inspection(s) and the Appraisal.
Inspection
When the Inspection is complete, you’ll be receiving an Inspection Report with all of the flaws of your Future Home.
We will upload this to the Client Portal, and we need to review it as soon as possible.
Some items will be minor (like a missing faceplate on an outlet in the attic). For those, we really don’t care UNLESS it will affect your financing.
But we can ask for Repairs at this stage, and most Inspection Reports have the ability to create a “Punch List” of Repairs.
Don’t overdo it.
If the doorbell doesn’t work, we’re not going to negotiate getting the entire house electrical system rewired and upgraded.
If the shower head leaks, we’re not requesting a Jacuzzi tub.
We only care about Immediate No Go conditions.
We can still walk away, no harm, no foul, before the Inspection Period ends via a Release and Cancellation form.
After that, we are locked in unless:
- The property doesn’t meet the Appraisal
- You can’t get Insurance
- or God Himself destroys the property.
The Appraisal
This is the Bank making sure they can justify the value of the loan. That’s it. Nothing else.
They need for the property to have at least enough value to resell it for what they have into it, in case you default and they foreclose.
Your Down Payment amount can help create a buffer here.
Depending on the Loan Type, if the Appraisal comes in low (eek!), there are a few options we can use.
ROV – Reconsideration Of Value
Tidewater – VA Loans
This means a LOT of math homework for me. And I hate math.
There is also the possibility of you covering the Appraisal Gap, that is, the property appraised for $350k, and we’re Under Contract at $360k.
You can choose to cover the difference of $10k Out-Of-Pocket.
But remember – that is in addition to your other Out-Of-Pocket expenses.