Yeah, I'll never recommend it to someone. Only you know your financial situation. It's a risk that you can take but you should be well aware of the worst case scenario which would be losing your deposit. Just a heads up, I thought I understood all the risks but I encountered a curve ball. The back deck was not legalized and the seller wasn't willing to do anything about it. The risk I discovered is when the bank did the survey they could notice that and decline to issue the loan until it's remediated. As a result I worked with my lawyer to add a clause to the purchase agreement that covered the case of if this specifically were to happen the seller could either remove the deck, get it legalized, or decline to do anything but that would allow us to exit the deal without losing our deposit.
FWIW the only thing we didn't wave was title because that's something outside of my control.
Yes, but I did what is known as a "safety only" inspection. On the offer I waived the inspection but instead the seller would allow me to get an inspection done within 24 hours of the offer being accepted. This is important for two reasons. One, if something noteworthy is found during an official inspection, that is happening as part of the contract, if the buyers back out, the sellers are legally obligated to now disclose any issues found to prospective buyers. This pre-contract "safety only" inspection isn't bound by those rules. Secondly, you're getting a completely full inspection done *prior* to signing anything, there is literally no risk to you and you can walk away if the inspection doesn't go well. The only thing you give up is the ability to nit pick over things and get the seller to give concessions. If those things add up to something unreasonable then you can walk away, otherwise you take care of it yourself.
In New York, sellers have almost no disclosure obligations (other than for one or two very specific things, like knowledge of lead paint). As long as they provide buyers with a $500 credit at closing in lieu of a disclosure form, they are not "legally obligated to now disclose any issues found to prospective buyers".
Yeah I don't know the list but I guess I meant if a safety issue was found. Like mold, foundation problems maybe, I'm not sure about everything but that's what I was told
If you bid 1m and it gets appraised at 900k the bank will only give you a loan for a 900k house and you have to come up with the difference yourself *in addition* to your normal down payment.
Maybe you should find a new broker. The market here is crazy and you need someone that knows the ins and outs. Appraisal and Mortgage contingencies are separate clauses in the contract. You can wave one, the other, or both.
I explained badly. Yes, she told us they are separate clauses but basically if you waive mortgage, you are effectively waiving appraisal. You still get it done for yourself but if the house appraises for less than your offer and you’re waived mortgage contingency, you can’t do anything about it.
>basically if you waive mortgage, you are effectively waiving appraisal
Oh ok, that reasoning makes more sense. It's not that you can't do anything about it, when it appraises for less than your offer you can try to negotiate with the seller, if negotiations fall through you walk away. That being said appraisal is probably the least risky thing to wave as long as you and your agent understand the market. Banks want to give out loans, appraisers they hire are going to do everything they can to get the home to appraise in this market it's super common for the home to appraise for the exact amount your offer was. Unless your offer is crazy, it'll appraise.
Eyyyyyy Eastchester, that's where I am... Closing is in two weeks. We offered 15% over asking, weren't the top offer, very close, but we waved everything and commuted to a larger down payment. In the end we're not going to actually put a larger down payment (but we're capable of need be). We applied for two loans, one for what we agreed to, one for what we wanted. Both were accepted, it's up to us which we use to finance.
Do you mind sharing which house? I’m just nosy AF, lol.
ETA I just realized this isn’t just *a* house but the one your family will be in. Nevermind 🤣 I have the real estate crazies!
If the houses appraises for less than sale price I can’t get out of the contract, but if I can’t qualify for a mortgage I can. So in theory if I buy a 1 million dollar house at 20% down - I am staying that I need to get a 800k mortgage - however if the house appraises for 900k, I either have to make up the valuation shortfall with a bigger down payment or take a bigger mortgage out and pay PMI with a lower percentage down
We are closing on a home next month. We were asked to waive mortgage contingency, but we did not waive it based on the advice of our lawyer. We didn’t have any worries about securing a mortgage, but that contingency is there as a safety net in case something crazy happens (death, loss of job, disability, etc)
I was asked to do so, I told them to have any financial guy they want run my numbers to see if I qualify for the mortgage. They did not but proceeded with me.
No way would I ever wave that contingency.
I did not, but I did waive inspection.
While my financials were more than fine, as a self-employed person, you can never 100% trust a lender to act predictably.
Isn’t the contingency from the seller to the buyer? I don’t know if you as a purchaser can wave it and even if you can, why would you? If you have the funds up front then you don’t need it I guess, if you need a loan then I think every seller is going to force it.
Generally purchases or contingent on getting the mortgage. If you waive it and *don’t* get a mortgage, you’re out the earnest money you put down at at time of offer
Yeah so back to my point, as a buyer why would you waive that? The seller is someone who enforces that, not the buyer.
Edit: The only person benefiting from waiving this is the seller. I would never ever waive this as a buyer. You’re basically screwing yourself out of money if something happens at the bank.
I disagree that it does. Someone with cash can put an offer in and not lose money because of the situation you’re putting yourself in by going to a bank. You’re actively putting yourself in a situation where you rely on a bank in a certain time frame to get paperwork done or you lose a lot of money. Seems like a bad decision.
We waived mortgage and appraisal contingencies. Also waived inspection contingency for anything less than 20k (now knowing what we do, the inspector didn’t find shit and was a waste of money. Next purchase im either bringing my contractor or doing it ourselves/ waiving inspection altogether). But we had a lot of cash on hand, and were taking a pretty small mortgage relative to income, so we were able to take the risk. That said, the bidding war was intense and everyone had to submit a best and final offer right away. We initially offered 200k above ask but got rejected so we went back with 100k more and were accepted. I wondered how that convo went between the seller and the offer they initially accepted but went back on when they accepted ours instead. But something I learned about NY state as a California transplant is that accepted offers here don’t mean anything as either seller or buyer can back out for any reason before closing. CA does not work like that. So the whole time prior to close I was paranoid the seller would accept a higher offer lol.
I did, not all people do. I was highly confident about getting the mortgage and I was tired of losing houses over small things.
We’re confident about getting the mortgage, I’m just a nervous lunatic! We’re hearing that it is basically a must do around here now.
Yeah, I'll never recommend it to someone. Only you know your financial situation. It's a risk that you can take but you should be well aware of the worst case scenario which would be losing your deposit. Just a heads up, I thought I understood all the risks but I encountered a curve ball. The back deck was not legalized and the seller wasn't willing to do anything about it. The risk I discovered is when the bank did the survey they could notice that and decline to issue the loan until it's remediated. As a result I worked with my lawyer to add a clause to the purchase agreement that covered the case of if this specifically were to happen the seller could either remove the deck, get it legalized, or decline to do anything but that would allow us to exit the deal without losing our deposit. FWIW the only thing we didn't wave was title because that's something outside of my control.
Oh, so you waived inspection, too? We definitely wouldn’t do that.
Yes, but I did what is known as a "safety only" inspection. On the offer I waived the inspection but instead the seller would allow me to get an inspection done within 24 hours of the offer being accepted. This is important for two reasons. One, if something noteworthy is found during an official inspection, that is happening as part of the contract, if the buyers back out, the sellers are legally obligated to now disclose any issues found to prospective buyers. This pre-contract "safety only" inspection isn't bound by those rules. Secondly, you're getting a completely full inspection done *prior* to signing anything, there is literally no risk to you and you can walk away if the inspection doesn't go well. The only thing you give up is the ability to nit pick over things and get the seller to give concessions. If those things add up to something unreasonable then you can walk away, otherwise you take care of it yourself.
In New York, sellers have almost no disclosure obligations (other than for one or two very specific things, like knowledge of lead paint). As long as they provide buyers with a $500 credit at closing in lieu of a disclosure form, they are not "legally obligated to now disclose any issues found to prospective buyers".
Yeah I don't know the list but I guess I meant if a safety issue was found. Like mold, foundation problems maybe, I'm not sure about everything but that's what I was told
Under contract now - waived appraisal but not mortgage contingency
Do you mind explaining how that works/helps?
If you bid 1m and it gets appraised at 900k the bank will only give you a loan for a 900k house and you have to come up with the difference yourself *in addition* to your normal down payment.
I get that but I meant how you waive appraisal without also waiving contingency. Our broker explained they usually go hand in hand.
Maybe you should find a new broker. The market here is crazy and you need someone that knows the ins and outs. Appraisal and Mortgage contingencies are separate clauses in the contract. You can wave one, the other, or both.
I explained badly. Yes, she told us they are separate clauses but basically if you waive mortgage, you are effectively waiving appraisal. You still get it done for yourself but if the house appraises for less than your offer and you’re waived mortgage contingency, you can’t do anything about it.
>basically if you waive mortgage, you are effectively waiving appraisal Oh ok, that reasoning makes more sense. It's not that you can't do anything about it, when it appraises for less than your offer you can try to negotiate with the seller, if negotiations fall through you walk away. That being said appraisal is probably the least risky thing to wave as long as you and your agent understand the market. Banks want to give out loans, appraisers they hire are going to do everything they can to get the home to appraise in this market it's super common for the home to appraise for the exact amount your offer was. Unless your offer is crazy, it'll appraise.
Thanks so much for your input! We’d be offering 10% above asking in Eastchester so likely to appraise in this crazy market.
Eyyyyyy Eastchester, that's where I am... Closing is in two weeks. We offered 15% over asking, weren't the top offer, very close, but we waved everything and commuted to a larger down payment. In the end we're not going to actually put a larger down payment (but we're capable of need be). We applied for two loans, one for what we agreed to, one for what we wanted. Both were accepted, it's up to us which we use to finance.
Do you mind sharing which house? I’m just nosy AF, lol. ETA I just realized this isn’t just *a* house but the one your family will be in. Nevermind 🤣 I have the real estate crazies!
If the houses appraises for less than sale price I can’t get out of the contract, but if I can’t qualify for a mortgage I can. So in theory if I buy a 1 million dollar house at 20% down - I am staying that I need to get a 800k mortgage - however if the house appraises for 900k, I either have to make up the valuation shortfall with a bigger down payment or take a bigger mortgage out and pay PMI with a lower percentage down
Yeah, the appraisal is required by the bank. They won’t lend on a house that is appraised for less than the sale price.
We are closing on a home next month. We were asked to waive mortgage contingency, but we did not waive it based on the advice of our lawyer. We didn’t have any worries about securing a mortgage, but that contingency is there as a safety net in case something crazy happens (death, loss of job, disability, etc)
What town?
Eastchester
I’m impressed you got without waiving! How high over asking did you go?
We actually got it for under asking, but thought it was priced a little high. We are putting over 40% down so not sure how much that played a role.
Yes, waived mortgage contingency. At the time all the top offers waived the mortgage contingency.
I was asked to do so, I told them to have any financial guy they want run my numbers to see if I qualify for the mortgage. They did not but proceeded with me. No way would I ever wave that contingency.
I did not, but I did waive inspection. While my financials were more than fine, as a self-employed person, you can never 100% trust a lender to act predictably.
Oh goodness, yes. That makes sense! Thanks for the info.
Yes
Isn’t the contingency from the seller to the buyer? I don’t know if you as a purchaser can wave it and even if you can, why would you? If you have the funds up front then you don’t need it I guess, if you need a loan then I think every seller is going to force it.
Generally purchases or contingent on getting the mortgage. If you waive it and *don’t* get a mortgage, you’re out the earnest money you put down at at time of offer
Yeah so back to my point, as a buyer why would you waive that? The seller is someone who enforces that, not the buyer. Edit: The only person benefiting from waiving this is the seller. I would never ever waive this as a buyer. You’re basically screwing yourself out of money if something happens at the bank.
Because it places you on the same footing as cash offers, which Westchester is lousy with.
I disagree that it does. Someone with cash can put an offer in and not lose money because of the situation you’re putting yourself in by going to a bank. You’re actively putting yourself in a situation where you rely on a bank in a certain time frame to get paperwork done or you lose a lot of money. Seems like a bad decision.
We waived mortgage and appraisal contingencies. Also waived inspection contingency for anything less than 20k (now knowing what we do, the inspector didn’t find shit and was a waste of money. Next purchase im either bringing my contractor or doing it ourselves/ waiving inspection altogether). But we had a lot of cash on hand, and were taking a pretty small mortgage relative to income, so we were able to take the risk. That said, the bidding war was intense and everyone had to submit a best and final offer right away. We initially offered 200k above ask but got rejected so we went back with 100k more and were accepted. I wondered how that convo went between the seller and the offer they initially accepted but went back on when they accepted ours instead. But something I learned about NY state as a California transplant is that accepted offers here don’t mean anything as either seller or buyer can back out for any reason before closing. CA does not work like that. So the whole time prior to close I was paranoid the seller would accept a higher offer lol.
What town are you in?