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Appraisal Addendum

Hi all,
We put an offer on a foreclosure property and right before it was submitted the sellers agent presented a document that they called a "purchase offer appraisal addendum". Below is the details of the document. They pretty much said if we do not sign it then our offer will most likely not be accepted. Since we wanted the house we did sign it but still have not been able to figure out exactly what it means. What if the house appraises for over my purchase price? Do we owe money then as well? I am trying to figure out if this is a bank doc or an agent doc. Making a decision on whether to pull our offer. I have attached the image of the document, and am ready to take the beating that I will receive for signing something I did not completely understand. They gave us a very short period to decide. I have presented it to both my attorneys (not real estate) and they had different opinions.
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January 19 2012 - US
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Answers (6)

Is your offer cash or finance? We just closed on a Wells Fargo REO. We did not see or sign this form. However we paid cash and no appraisal. If your paying cash there is no reason for appraisal or this form. If your financing then  the bank is trying to get more for the home by saying if it appraises for more than your offer you pay the difference. Either way I would not sign this form.
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July 29 2013
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Yes that is what my 2 attorneys said when they looked at it.  They are not real estate attorneys though so I wanted to see what everyone here thought.
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January 19 2012
zippy900, that is really strange, it could be interpreted either way. I would submit the offer without signing this doc, see what happens. I wouldn't sign it.    
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January 19 2012
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Hi guys.  Sorry for the small print.  I have typed the specifics below exactly the way its written.  Thanks!

If offer is contingent on the house appraising for the purchase price or higher, buyer shall hereby agree to pay the difference between their offer amount and the appraised value.  Additionally buyer shall provide proof of funds at time for offer for the difference of offer amount and list price, plus the down payment amount. 
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January 19 2012
It is too small to make out. In most cases, an appraisal addendum would address your right (or the lack of your right) to cancel if the appraisal came in below the contracted sales price. It would be extremely unusual for something to call for you to raise your price with an appraisal that came in over value.
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January 19 2012
I cannot make it out, its too small for my eyes, however if the house appraises for over what you paid for it, hurray,but no you do not have to pay more,
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January 19 2012
 
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