Trec Third Party Financing Addendum: Fill & Download for Free

Not every State handles appraisal issues exactly the same way so I can only answer what happens in Texas. And as always, I AM NOT AN ATTORNEY!The TREC (Texas Real Estate Commission) promulgated forms address appraisal in the actual purchase documents.If your buyer is utilizing a VA or FHA loan, the Third Party Financing Addendum actually addresses the appraisal and what happens if value is not met. Conventional financing, through this same addendum, offers a financing contingency clause for a timeline within which the buyer is protected. There is also now a specific Addendum that allows buyer to terminate the contract as it relates to the appraisal. This new addendum clears up any ambiguity as to the appraisal, if seller agrees to sign it.That said, an appraisal is still a subjective opinion of an appraiser. I have experienced multiple appraisals on properties that have varied widely with little or no reason for the variation. I have seen good transactions killed because of sloppy appraisals and limited ability or recourse to correct a flawed appraisal. Again, it is just an opinion. However, usually the mortgaged amount is based on the sales price and any deviation from that sales price will have to be approved by the lender or the shortfall made up by the buyer at closing.Buyers,in my experience, have the following choices to make if the property fails to meet value.Renegotiate with seller and convince seller to agree to sell at appraised value.Renegotiate with seller to meet somewhere in the middle, seller agrees to lower price below sales price but not at appraised value and buyer agrees to make up difference at closing.Buyer accepts sales price and makes up entire difference between sale price and appraised value at closing.Buyer terminates contract and moves on. However, buyer should confirm with an attorney any ramifications, legal and financial, that such a termination might cause.Personally, if you are working with a really good REALTOR who can demonstrate the market, then you can make a good decision as to which path to take. If you are in a very hot, low-inventory market, then chances are many homes will not appraise, especially if they are involved in multiple offer situations. Just because an appraiser cannot show a specific value using his formulas, his knowledge of the market and knowledge of the specific area, does not mean that the value is not there. My current home appraised $ 20,000 less than the contract price. The market was hot, inventory extremely limited and I wanted this house, in this community, and I was willing to pay the difference to make it work.Hope that helps. Good luck!

I have no experience with OfferPad, but based on a quick browse on their website, it seems like they pay a lower price for your home in exchange for convenience and speed. Probably 20–40% below market value, as they would need to make money.A realtor you would give up 5–6% of total price, however this would be the most hassle free method.If you don’t mind doing work, you can list as a for sale by owner on facebook groups and zillow. You would have to do all your own showings and prepared to get a bunch of realtors asking you to list with them. This would save you the most money in terms of fees/commission however, but you need to know which forms you need. However, this method lacks exposure. The majority of buyers are browsing on the MLS (Multiple Listings Service) aka where only licensed realtors can list homes for sale.The best method that maximizes exposure while minimizing commission and fees is a Flat Fee MLS Listing service. They are dependent on your location, but most charge anywhere from $250 - $500 to list your home on the MLS. That means it will show up on realtor.com, zillow.com, trulia.com, http://redfin.com etc. This will maximize your exposure. However, you still have to negotiate with buyer’s agents and pay the buyer’s agent 2–3% (you can choose how much). You basically fill out all the informational paperwork and send them all the pictures and type up the description you want to show on the listing and they post it on the MLS for you.For example, I just sold one of my flips as a FSBO on Zillow . I took my own pictures, uploaded them on Zillow and filled out all the information about the house. Be sure to include your cell phone and email in the information!The buyer contacted me directly on my cell phone. We setup a time for him to see the house, he liked it and said he wanted to come back so his wife could see it. I had to go catch a flight during the time they wanted to go back, so I just texted him the lockbox code so they could go inside and take a look.A day later, he called me and offered $3,500 above asking price! I accepted and had to walk him through the process as he had never purchased a home before.I filled out the TREC (Texas Real Estate Commission) residential 1–4 contract, seller disclosure form, third party financing addendum, and lead based paint disclosure, signed my portion and uploaded them to DocuSign and emailed to the buyer for him to sign. You could also meet up in person if they aren’t tech savvy.Once he sent me back the signed contract, I turned in the contract to a title company to open escrow and begin title search. At the same time, I requested the title company order a survey, and told them buyer to make sure their lender begins ordering the appraisal and inspection.If anything comes up in inspection, you can negotiate with the buyer what you will and will not fix, if you will give a credit on the price instead, etc. If the inspections are fine and title search is fine, you just wait for the appraisal to finish. If it appraises out, you will setup a closing date and time with the title company, and both parties sign all the paperwork and your house is sold!