馃攳
Appraisal Gap Coverage - Make Your Offer More Competitive - YouTube
Channel: unknown
[0]
- Hi, I'm Jeff Chubb of the REN network.
[1]
And today we're here with Jason
Bonarrigo of RMS mortgage.
[4]
And we continue to talk about
the Buying Power Checklist
[6]
that we give to all of our buyers
[7]
about how to make their
offer more competitive
[10]
in this competitive marketplace.
[11]
To that point, today we're talking about
[13]
Appraisal Gap Coverage.
[15]
Now we've talked about
waving an appraisal.
[17]
- Yes.
[17]
- So which has a lot of rescues to buyer,
[20]
Sellers love it.
[21]
- They love it.
[22]
- Absolutely.
[23]
So an appraisal gap coverage
is that middle ground.
[27]
So, appraisal gap coverage
is often really where
[29]
when we submit our offer to the sellers
[33]
We say, if there is a gap
[35]
in the appraisal of the
first, let's say 20,000.
[38]
So the property under agreement
[40]
for 500,000 and the
appraisal comes in at 480
[43]
and we have appraisal
gap coverage of $20,000
[46]
then we're saying to the seller, "
[48]
Hey look the first $20,000
of an appraisal issue,
[50]
we're taking care of.
[52]
Which a lot of times we
can just move some numbers
[55]
around on the spreadsheet, right?
[56]
- Sure, it works like that.
[57]
And obviously the important,
[58]
the reason that's so important too
[60]
and for those of you who don't know
[61]
is at the lenders go off
the lower of the two values
[63]
or the contract price again is 500
[65]
and the appraisal come back to 480,
[67]
we're gonna have to go off the 480
[69]
based on your down
payment, your loan to value
[71]
and your equity position.
[73]
So that coverage is massive
[75]
and making that seller
feel okay with it too.
[77]
- And so what I think is great,
[78]
anas when we're working as a team,
[81]
cause in this market it takes a team
[83]
- It does.
[84]
- in order to get the offer accepted.
[86]
- True.
[87]
- And we have specific numbers in play.
[88]
A buyer could actually call
you and say, okay, Jason
[91]
the property's for 500,000
[92]
that's what we're putting the offer in,
[94]
how much could we put an
appraisal gap coverage where it
[97]
wouldn't change our rates
or our program or anything.
[100]
And you could actually
give them a firm number.
[103]
- I can, and again, we talked about this
[106]
in a in a similar video but just,
[107]
it really depends on the buyer.
[108]
If they're putting 5% down or 3% down
[109]
that might be a different conversation,
[111]
- Right.
[112]
- But if they're putting 20, 30, 40% down,
[113]
then obviously the conversation changes to
[116]
then I can tell them that number
[118]
and have some flexibility with it
[120]
- But not even 30 or 40% down
[121]
the buyer who's putting a 17% down
[124]
- Right
[125]
- The difference between 10% and 17%
[128]
- They can just click
down to that next bracket
[130]
which will be 15% down or 10% down.
[131]
I would just run the quick
PMI numbers, let them know
[135]
if it changes their
rates, where it usually
[137]
doesn't. And then we can kind of
[138]
have a comfortable number going forward
[140]
- To the same point.
[140]
Like I even somebody
putting 8% down instead
[142]
maybe they're putting 5% down.
[144]
If it was a $500,000 purchase
[146]
they just found extra
15 grand quote unquote
[149]
in the deal without
changing a single thing.
[151]
- Exactly.
[152]
And we can still do it.
[152]
It's when you start to
get a little bit short
[154]
of that 5% number that's
when things get, get funky.
[156]
But your true, if you
have that, that capital
[159]
or even some in reserve that,
Hey, you don't have to put
[161]
down every dime for your down payment.
[162]
You're saving that's if you
have to bring the difference.
[164]
And that's when the appraisal
gap coverage is huge
[166]
and explaining that to the seller.
[167]
So you have a confident deal going in
[169]
- And it's important to, to
know that everybody's situation
[172]
is different.
[173]
- Of course.
[174]
- So, there is no broad
brush stroke that we're
[177]
talking about here, and
that's why they really need to
[179]
ultimately reach out
to you and talk to you
[180]
about their specific situation and
[182]
what can they do in order to make
[184]
their offer more competitive
[186]
- In conjunction with their realtor.
[187]
Because obviously what
we're trying to do is
[189]
make you as strong as possible
in this competitive market.
[191]
So the more that you're communicating
[193]
with your team, right, would
the rest of your attorney
[195]
your lender and your
realtor, that's the key, Hey
[198]
what are we trying to do?
[199]
How we look and what market's a win
[200]
and how much over asking
them, we trying to do
[203]
do we have an escalation
clause, things like that.
[205]
But if everyone's on the same
page and you're communicating
[207]
you have a much stronger
chance as opposed to going in
[210]
blind.
[210]
- And that's why, just for you to know,
[213]
I as a real estate agent
[215]
I always prefer the appraisal gap coverage
[217]
over just waiving the appraisal
because waiving appraisal
[220]
there's a lot more risk,
[222]
from appraisal gap coverage perspective,
[224]
We know , exactly how much
and we can prepare for that
[227]
Versus when you waive an
appraisal you get a bad appraisal
[230]
- That's it there's really no recourse.
[233]
You don't have the protected
[234]
because you've essentially waived it.
[236]
And that's part of the contract.
[238]
- Well, should you have
any additional questions
[240]
about appraisal gap coverage
or really any questions
[242]
in regards to how to make
your offer more competitive
[245]
in this competitive market?
[246]
You can reach out to Jason Bonarrigo.
[247]
Jason, how do they reach out to you?
[249]
- at cell phone (617)
413-5038 or send a text
[254]
- And he works with RRMS
mortgage and I'm Jeff Chubb.
[256]
My team, the Chubb homes team.
[258]
We're brokered by exp Realty.
[259]
You can reach us at (617) 480-2600.
[263]
Or you can reach us online @bostontwo.com.
[265]
Thanks for watching.
[266]
We look forward to hearing your questions
[268]
and before to chat with you soon.
[271]
(bright upbeat music)
Most Recent Videos:
You can go back to the homepage right here: Homepage