Congress passed another ridiculous bill to address housing affordability – that will do nothing to address housing affordability (it’s just pure political theater).
The bill restricts corporate investors from buying homes, but they make up a minuscule portion (0.7%) of the market – and they actually HELP the market by buying when it is very soft.
The bill forces “build-to-rent” builders to sell after 7 years – and that will REDUCE the supply of housing because fewer of these homes will now be built.
The bill funds grant programs – which will make housing LESS affordable by increasing demand and thus prices.
And – the bill does nothing to actually fix the major problems (1) local zoning that restricts building; (2) local red tape, fees, and green mandates that massively inflate costs; and (3) inflation (with tariffs not helping matters).
When to Waive Appraisal Contingencies
We still often have buyers in competitive bid situations. To strengthen their offers, we sometimes encourage them to waive their appraisal contingencies, provided they are comfortable with the offering price, irrespective of the appraised value. For the full decision framework, see our guide to waiving the appraisal contingency.
Here are some of the criteria we consider before suggesting a contingency waiver.
- Low Loan-to-Value. If borrowers are putting down 30% or more, there is often little risk to waiving an appraisal contingency. Even if the appraisal comes in low, financing options will often only be marginally impacted, if at all.
- An appraisal waiver. Fannie Mae, more formally, refers to these as PIWs (Property Inspection Waivers). These are more common than ever, given how many property appraisals are now in Fannie Mae’s and Freddie Mac’s databases (a requirement for getting PIW).
NOTE: Most lenders are happy to check for PIW status for a particular property when buyers are making offers. - Very strong comparable sales. If there are numerous recent and very strong comparable sales to support the offer price. “Model matches” in a tract neighborhood are the best examples. Our appraisal team is happy to evaluate comps for buyers.
- Alternative financing availability. If a buyer is putting down 20% for a $1 million purchase, but the appraisal comes in at $900,000 – that buyer can just pivot to a 10% down purchase. This will leave more than enough cash to cover the appraisal shortfall ($90,000 for the down payment; $100,000 for the appraisal shortfall; total out-of-pocket: $190,000). NOTE: There will be PMI, but PMI is very cheap nowadays and there are single payment options that sellers may help cover.
- Buyers have tons of cash. If a buyer is putting down 20% or $200,000 for a $1 million purchase, but that buyer has another $500,000 liquid, a $100,000 shortfall can be easily covered.
