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Buyers agent question

Why would a buyers agent try to convince us that changing the financing contingency to 90% of offered purchase price doesn't hurt when it comes time to negotiate after appraisal? On a contract that stipulates VA loan.
  • June 13 2012 - Nisqually Indian Community
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Answers (10)

Maybe your agent is, for some reason, thinking you are desperate not to lose this home? Did you ask the agent why? What was the explanation you were given?

Personally, if I had buyers who were worried about losing a home due to a low appraisal, I would try my tail off to counsel them NOT to pay more than appraisal. When you see as many people dealing with forclosure and short sale as we are, I think it would be just dangerous to pay more for a home than it was worth.
  • June 15 2012
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Profile picture for user1448035
Thank you.  We are looking into legal assistance with this.
  • June 15 2012
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if you are not comfortable with your agent, get a meeting pronto with their broker and sit down with the contract and go over the points to see where you stand.  typically a 'contigency' gives the buyer an 'out' not trapping you in a contract.. there is not enough information in this post to make an accurate call on what you signed up for... good luck

  • June 13 2012
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Profile picture for user1448035
Thank you, John. That helps some. There was another offer contingent upon home sale. We thought we still had some strength in the offering stage because we didn't have that contingency.  Our agent asked how much we were planning to put down  we said 10% for lower VA loan funding fee and more room to negotiate.
So confused now.  Afraid we might be stuck having to pay quite a bit above appraisal and if we can't come up with the cash difference plus enough to still put 10% on our loan then we will also need to come up with the higher VA funding fee.  We don't want to be accusatory toward our agent, but not sure our best interests are being looked after. 
Not sure if we can trust our agent with this question or should seek legal advice about the contract.  Should note we are not in Washington if that makes a difference Don't know how it picked the location
  • June 13 2012
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Profile picture for sunnyview
I would ask them to explain. Even if appraisals are coming in low, guaranteeing the seller 90% of your original offer may mean you will have to pay out of pocket even if you cannot borrow enough. Your agent needs to explain and if they don't it may be time to look for another agent who will.
  • June 13 2012
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Profile picture for 1AllisonSmith
The financing addendum doesn't have a spot to negotiate 90% of the purchase price. So I am not sure how to answer your question. Did your agent create their own financing addendum and not use the standard mls form?
  • June 13 2012
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Profile picture for nwhome.us
It would be helpful if you gave us your agent's description of why they are suggesting it.  VA loans are not particularly helpful in strengthening your posistion if there are other offers for the property; they have a number of requirements that aren't in other products.
On the surface I'd agree with you; if the appraisal comes in 10% low, I'd rather deal with it at that time because you certainly have the option of paying full price in that scenario also, but additionally you may need to negotiate something more.
  • June 13 2012
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The financing contingency field.  Doesn't that trap us into the offer price if the appraisal comes in low?
  • June 13 2012
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Which field are they changing to 90% of purchase price?
  • June 13 2012
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Because appraisals are coming in low.
  • June 13 2012
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