BC: Special Stipulations for Additional Payment over Appraisal

In this very hot seller’s market, buyers are doing everything they can to be the winning bid in multiple offer situations. It is now very common to see buyers waiving the finance contingency and agreeing to pay a purchase price above the appraised price.
 
Avoid extra steps and stress. Consider the following appraisal and price issues:

1. Special stipulations regarding the amount the buyer is willing to pay above the appraisal must be clear.  A vague special stipulation can make the contract unenforceable and/or subject to more negotiation.
2. A cap on the amount the buyer is willing to pay over appraisal and a cap on the final Purchase Price keeps the price within the buyer’s projection and protects the buyer against an unscrupulous Seller (The one that has his best friend offer a higher price so your client’s escalated price keeps on going up.) 
3. Include a remedy if the agreed dollar amount the buyer will pay over the appraisal is lower than the purchase price.  Query:  Which is best? An automatic price reduction or a procedure that allows for a termination?  (Compare #2 and #4 below.)

In this very hot seller’s market, buyers are doing everything they can to be the winning bid in multiple offer situations. It is now very common to see buyers waiving the finance contingency and agreeing to pay a purchase price above the appraised price.
 
Avoid extra steps and stress. Consider the following appraisal and price issues:

1. Special stipulations regarding the amount the buyer is willing to pay above the appraisal must be clear.  A vague special stipulation can make the contract unenforceable and/or subject to more negotiation.
2. A cap on the amount the buyer is willing to pay over appraisal and a cap on the final Purchase Price keeps the price within the buyer’s projection and protects the buyer against an unscrupulous Seller (The one that has his best friend offer a higher price so your client’s escalated price keeps on going up.) 
3. Include a remedy if the agreed dollar amount the buyer will pay over the appraisal is lower than the purchase price.  Query:  Which is best? An automatic price reduction or a procedure that allows for a termination?  (Compare #2 and #4 below.)