"appraisal contingency"

interesting. If hte appraisal comes in low, its up to you to fill the difference. The bank will only lend on the appraised price. Im not sure why your broker would tell you to waive the fin contingency though, I would leave that in and if the appraisal comes in too low, either the deal falls through or the price re-negotiated.

The only reason I can think of for your broker to tell you to waive the financing contingency is he wants to pressure you to close a deal so he gets his commission. I can't see how your interests could possibly be served by waiving the financing contingency - unless you have enough cash to buy the place outright without any trouble, and such a waiver will induce seller to give you a price break.

Is your broker a fullblown scumbag or is there something more here?

I'm selling a place and I got an offer with an unspecified appraisal contingency.

I think it's just an underhanded way around the financing contingency. If I accept that offer (I have a few) I'll push for a very low level. Thinking about $65K below the bid level.

Noah, Does that sound like decent way for a seller to handle it? I know it's the opposite side of the coin.

I am also wondering about the financing contingency and what is realistic to expect from a seller - particularly in a new development. I'm not nervous about my ability to get a loan, but given the state of the market, do you think that developers will give financing contingencies that last to closing on new construction? Or is that just unrealistic?

I agree with Mel. 'Your' broker gets paid by the seller and so might or might not have your best intetest in mind. Your attorney should be guiding you on this.

Here's something I've not understood: Assume you waive financing contingency in a co-op, and you don't have the money to do the deal without the loan. Then your financing doesn't come through. So you go to the Board interview and explain you have no idea how you'll pay for the apartment without the loan and may well default in short order. The Board would likely never approve someone who can't pay for the ongoing costs of ownership. They will deny you. So, since a board won't approve a buyer without financing, aren't you pretty much covered even without a financing contingency in the contract?

I am surprised in this market sellers would actually demand a financing contingency (sounds like a nervous seller to me) or that a buyer would even consider one. Wyndcliff is right...talk to your attorney and your mortgage broker. When this first came up a year ago, both of them advised me against it. It's a way of seller shifting the risk on to the buyer...unless you're doing an all cash deal, or have a backup in financing, it's hardly ever a good option.

nomad: I think I understand you, but did you mean that you don't understand why a seller would insist on a WAIVER of financing contingency? Ordinarily the buyer insists on the contingency clause to get his/her money back if financing falls through--it isn't something seller's demand.

yes, that's exactly what I meant...that as a buyer you wouldn't want to waive a financing contingency...

There doesn't seem to be any benefit to you agreeing to this. What happens if the appraisal comes in fine but the bank does not approve the financing because it ups its income, credit and other requirments? It's a pretty tough environment out there.

Not sure why a broker in his right mind would advise this. Seems like it is only in the sellers interest. If the seller is offering a financing contingency, I would certainly not waive it.

Unless the seller is not really offering that, but you are making it a condition to proceed as a part of your bid. It's more likely that a seller would agree to an appraisal contingency than a financing contingency.

As a broker, I personally would never advise my buyer-client or buyer-customer to waive the mortgage contingency. Unless the deal is all cash or you are buying something at 50% value and want to impress the seller with the amount of your earnest money deposit.

It's in the best interest of a buyer to include mortgage contingency in the contract no matter how sure he is on obtaining financing. I don't see any reason to break it up to "financial" or "appraisal" contingencies. The meaning of the mortgage contingency clause is that if for ANY REASON the buyer cannot get financing - he gets his earnest money deposit back.
BTW, I never heard words "appraisal contingency" or "financing contingency" - these terms are not professonal :)

Igor - welcome back. I started a whole thread a while back trying to get in contact with you. Oh well...

Igor--you have never heard the term "financing contingency"? This term is not "professional"? I beg to differ. Moreover it sounds to me as though the broker is advising the appraisal contingency not as a better form of protection(as it certainly is a more narrow protection), but as a potentially acceptable compromise--perhaps the seller won't accept a financing contingency per se.

Yeah, a number of people have lost their 10% or more in deposit over this. My brother-in-law got to keep the buyer's 10% deposit when the buyer couldn't get the financing to purchase his apt. El Doctore, you never replied whether it was your broker or the seller's broker who suggested this...did you ever decide?

seems like this credit crunch thread keeps coming up. I think this previous thread puts the whole waiving of financing contingency in perspective. Scary at best.

http://www.streeteasy.com/nyc/talk/discussion/2861-new-condo-financing-is-over-people-losing-contract-deposit

It seems like with a somewhat less frenzied market some new developments are actually allowing financing contingencies at this point (several have brought it up--"as long as you use one of our preferred financing partners"). The usual approach of allowing a certain period of time to get a commitment letter doesn't seem appropriate when there's a long delay between the initial contract and actual closing. Has anyone been able to arrange reasonable financing contingencies in new developments, and if so what sort of terms have you been able to agree upon?