For VA/FHA loans, if my buyer agrees to waive the appraisal contingency and appraisal comes up 10K short then they can pay the extra 10K difference, plus whatever else is needed to close, to get it done??? Gonna push my price a little on my flip I'm about to list and wanted to see what some of you BP guys/girls have to say about this. I believe it could still appraise for the price I'm gonna ask but not a lot of support with actual sales prices of apples to apples properties in the area, but my property is much nicer with more upgrades than the other properties sold. Anyways, property is located in Southern California and not exactly sure about VA/FHA rules on making up the difference of appraisal to close the deal if appraisal waived.
Go read the FHA/VA Amendatory clause before you get too excited about your plan. Effectively, there is no such thing as a waived appraisal contingency for someone using FHA or VA financing.
@Chris Mason thanks for the response, so if appraisal comes in short, then the buyer cannot say I want to put more money down and still buy the property using a VA or FHA loan? Or does this completely ruin the deal all together and only other option would be for me to go with appraisal price or buyer goes with conventional, making up the difference of appraisal, or all cash?
Originally posted by @Mike Flora :
Chris Mason thanks for the response, so if appraisal comes in short, then the buyer cannot say I want to put more money down and still buy the property using a VA or FHA loan?
They can if they wish to, you just don't get to keep their earnest money if they don't wish to.
@Chris Mason that's fine on the earnest money. Talking about that with the buyers agent before hand could steer everyone in the right direction anyways with desire for the property and extra money to close if need be. I just didn't know if there was some rule that FHA/VA had that would kill the deal if appraisal was less than purchase agreement price. The 90 day flip rule for FHA still confuses me so just thought I would ask on this one as well. Thanks Chris