The current RE market is prompting buyers to offer an amount of money above appraised value. This is sparking many conversations and disputes among agents, brokers, & lawyers! In order to stay ahead of the rest and protect yourselves, we are offering the following language that MUST be used in every instance where $$ above appraised value is being offered.
1. In the event the Property appraises for less than the Purchase Price, Buyer agrees to pay $ .00 over appraised value, not to exceed the Purchase Price. The terms of this Paragraph amend Section 8.2.
2. Any reduction in Purchase Price based upon the Property appraising for less than the Purchase Price as set forth in Paragraph 1 above must be agreed to in a separate addendum between Buyer and Seller. Seller has no obligation to agree to a reduction in the Purchase Price in the event the Property does not appraise for the Purchase Price. In the event Seller does not agree to the reduction in Purchase Price referenced above, Buyer shall have the right to cancel the REPC in accordance with Section 8.2 of the REPC, and receive the full return of Earnest Money without the requirement of further written authorization from Seller.
Additionally the UAR has created addendum 75 with similar language that can be used with an offer. The appraisal floor would be the lowest appraised value buyer would be willing to pay.