Monday, March 5, 2018 / by Lindsey Gudger
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If you’re a buyer and you haven’t heard of an appraisal buffer form, you’re working with the wrong person.
Basically, this form guarantees that if you go under contract on a home and it appraises for less than what your offer is, you’ll bring however much cash is necessary to the table to cover that low appraisal. By including this form in your offer, it gives you a great competitive edge. The reality is, most agents don’t know what this form is and don’t use it, so when you’re competing in a multiple offer situation, it’s especially advantageous.
For our team, this form also acts as a psychological tool. Low appraisal situations don’t come up very often, but if you’re a buyer making an offer, part one of that offer involves painting yourself in the best light possible, and part two involves calling into doubt the offers you’re competing against. If you put it into the seller’s mind that you’ll bring X amount of dollars to the table in event of a low appraisal, they start thinking about low appraisals.
If you have a little extra cash, you might as well use it to leverage your offer, because waiting to buy for another month or two will eat up that amount anyway.
If you have any other questions about appraisal buffer forms or you’re thinking of buying or selling a home in our market, don’t hesitate to reach out to us. We’d love to help you.