Using the Addendum Concerning Right to Terminate

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Sep 28, 2022 499 Answer a Question

I am representing a buyer who is working with cash but has certain guidelines. She is putting in an offer with cash and is giving the seller the asking price but is contingent on the appraisal coming back for that price. Addendum Concerning Right to Terminate Due to Lenders Appraisal states to use this form only if using third party financing addendum, so can I put it in special provisions?

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Rashida Nagarwala
About 1 month ago
I would assume this would go under special provisions as there is no other place to add this. I suggest running this past your broker.
Richard Luebeck
About 1 month ago
Cash buyers typically do not do an appraisal because it is not required. I would advise you to get with your broker.
Angela Chaney
About 1 month ago
The saying cash is king is because A) you don't have to worry about the loan approval contingency, B) they typically can close faster, and C) you don't have to worry about the appraisal contingency. There is not a specific form for an appraisal contingency on cash deals, as appraisals are required by lenders to protect their investment and not lending more than the home is actually worth. I would ask for further clarification from your client as to why an appraisal is required. They may not realize as a cash deal, appraisals are not required. Ask more questions: maybe they want an appraisal for peace of mind they are buying a worthy investment, in which case I may offer to run comps for them. Or maybe they are using something that requires an appraisal & if that is the case I would want further clarification of any other stipulations. But like everyone else said, and depending on the clients answer, I would speak to my broker and likely put something in Special Provisions.
Glay Posch
About 1 month ago
If by “working with cash“ you mean that it is a cash offer, an appraisal is not required, because there would be no Lender. However, if your client simply wants to make sure they’re paying a fair price for the property, which is completely understandable, maybe you could do a detailed comparative market analyses for the her. RPR (realtor property resource) is a great CMA tool. As far as using “special provisions” for noting this condition, I would definitely check with your broker.
Gabriela DeLaTorre
About 1 month ago
Great answers by everyone. Definitely run a detailed CMA and if your client lives in the area I would recommend driving by each comparable so he / she feels more at ease with proposed price. No appraisal needed for cash contracts as mentioned by others.
Kiriaki Koymarianos
About 1 month ago
Cash buyers can still request an appraisal and put the provision to terminate the contract if the house doesn't appraise
Koshy Oommen
About 1 month ago
The special provisions section of the TREC contract is not the appropriate place for license holders to insert provisions that have legal implications or materially amend the contract terms. Ask for a 14 day Option period. That's plenty of time to get an appraisal back.
Yvonne Chauvin
About 1 month ago
Hi Herma. Contrary to all other responses, a cash buyer has every right to an appraisal and a right not to overpay. I think the best way to approach this would be to have an attorney draft an Addendum Concerning Right to Terminate. Doesn't have to be long and elaborate, just a simple form will do. I think it will be better than using space in Special Provisions for that. Good luck!
Stacy Burgin
About 1 month ago
Usually the reason for cash is king is no financing contingency and that is why sellers choose cash over financing usually. If your adding a finance contingency then what is the purpose of taking the cash deal over a conventional deal for say?
Alpana Romana
About 1 month ago
If your clients paying cash, no need appraiser and not to on third party finance as well as special provision, but you can ask them for Option period and cancelled on that time. you can check with your Broker. And that's reason for cash Buyers they ask more deposit. you can OP more longer time and after inspection and appraiser he can buy it or cancelled or negotiate on OP time, Otherwise sent termination and ask EM. Ask your Broker is BEST.
Penny Clissold
About 1 month ago
When buying with cash there is no appraisal and that’s why there is no form for it. Do Not put in special provisions. If your buyer wants to pay for an appraisal even if one is not needed she can have it done during option period and back out if it comes in low. Most all listings now are getting over asking. You however doing comps should be able to tell her the true value of the home for free.
Evelyn Marquez
About 1 month ago
Great answers from everyone, if I were you I would make sure to run the CMA for peace of mind of your clients, I have my precautious what to input on Special Provisions.
Joe Applewhite
About 1 month ago
If your cash buyer is requiring an appraisal, then just put a longer option period. I’m assuming you are getting an inspection done as well. Order both as soon as the docs are executed. Make sure you know the due date on that appraisal. The inspection will be fast. The appraisal may take a couple weeks. You can call the appraiser ahead of time to see how much time they need. Then make your option period that long plus a few days.
Maira Quintanilla
About 1 month ago
Yes, when buying cash an appraisal isn’t required as if buy with a loan but if seller and buyer agree to one it’s part of the terms. I would get with your broker to properly add in those terms with a protection for the buyer if it doesn’t appraise into the contract.
Pauline Clement
About 1 month ago
To answer the question of can you put this in special provisions, may be an opportunity for you to certainly discuss this with your broker and or legal. As far as the purchaser having certain conditions that must be met and prior to the purchase, indeed I agree with a few of the other responses in that a longer option period may be the best option for these conditions to be clear before having this purchaser bound to a contract awaiting an appraisal. If the purchasers conditions are based on items such as a roof or other factors that may somewhat affect the outcome of an appraisal, then these items should be taken into account with the option period and inspections and comparables and the bottom line price of what that purchaser is willing to pay if these conditions are not met.
Disclaimer: Answers provided are just opinions and should not be accepted as advice.
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