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By Laura Gomes<\/div><\/div>\n

In today\u2019s hot market, buyers want to make their offer more appealing, and some consider the addition of \u201cappraisal gap\u201d language. But that can create unexpected problems \u2013 and it\u2019s not one of the core elements included in Florida Realtors\u2019 contracts.<\/p>\n<\/div>\n

ORLANDO, Fla. \u2013 Part II of a three-part series: Buyer\u2019s offers. The series focuses on potential pitfalls when buyers attempt to make their offers \u201cmore appealing\u201d in today\u2019s market.<\/p>\n

Many buyers are tempted to \u2013 and often do \u2013 remove or change certain aspects of their offer to make it more appealing, in hopes the seller will accept their offer. However, it\u2019s important to understand that these buyers\u2019 changes may not always be the best idea \u2013 and could potentially lead to problems.<\/p>\n

The first article in the series focused on waiving inspections. This article focuses on appraisals in relation to the transaction and some regular problems we hear on Florida Realtors Legal Hotline<\/a>.<\/p>\n

First up: We hear a lot about agents adding \u201cappraisal gap\u201d language, where buyers say they\u2019ll pay a certain amount over the appraised value. Some expect the appraisal to come in low and, if it does, the buyer can lower the purchase price to whatever that amount is.<\/p>\n

The issue with this language? It generally does not mention anything about modifying the purchase price, or, more importantly, that sellers will agree to change the purchase price. Without some sort of language pertaining to changing the purchase price, buyers must still pay the purchase price stated on the contract.<\/p>\n

Unfortunately, Legal Hotline callers cannot find much relief from Florida Realtors\u2019 lawyers. The language added is not Florida Realtors\u2019 language, and the Legal Hotline isn\u2019t able to interpret this clause for agents or their clients. If considering this language, it\u2019s best for the parties to speak with an attorney to draft language that ensures it sufficiently covers what the parties intend, or to understand what they have already agreed to.<\/p>\n

Second, buyers financing their purchase should be aware that their lender may not allow them to pay the difference laid out in their appraisal gap language. It\u2019s recommended that buyers check with their lender in advance and ask if there are any issues with obtaining financing if they want to add this sort of language to their offer.<\/p>\n

Third, buyers looking to \u201cwaive the appraisal contingency\u201d should know that Florida Realtors\/Florida Bar Contracts have no appraisal-to-the-purchase-price contingency built into their core. If a buyer wants the option to get out of the contract if the property fails to appraise to the purchase price, they should use the Comprehensive Rider F, Appraisal Contingency.<\/p>\n

In any instance, a buyer should speak with their own attorney to understand the potential protections they\u2019re waiving and the problems that may arise if they waive various contingencies in order to make an offer more appealing.<\/p>\n

Read part I: Legal Dangers If Buyers Make Offers \u2018More Appealing\u2019<\/a>
\nUp next: Loan Approval period and financing<\/p>\n

Laura Gomes is a Florida Realtors attorney<\/em>
\nNote: Advice deemed accurate on date of publication<\/p>\n

\u00a9 2021 Florida Realtors\u00ae<\/p>\n<\/div><\/div>\n

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