Surely we've talked about this before, but it's happened again- we talked to another lender who wouldn't order an appraisal on a contract until the inspections were done.
In Springfield, using the Springfield contract, a buyer is responsible for paying for and ordering both the credit report and the appraisal with the default position being 7 days from the effective date of the contract.
Therefore, waiting until after inspections may place a buyer in default on the contract, meaning that they haven't met their obligations. Even if this decision is made by a lender, the lender may have unintentionally placed the buyer in default on the contract, and if an agreement is not reached between the buyers and the sellers over inspections or any other matters, the seller could come back and hold the buyer for breach of contract because they didn't pay for and order the appraisal to be done within the course of the contract.
Now, of course, the reason that buyers (or lenders on behalf of buyers) wait to order an appraisal is because once you order an appraisal, you have to pay for it, and if the inspections identify a number of problems on the property and the buyer either doesn't want to complete the purchase or cannot come to an agreement with the seller as to the repairs to be made, it would save money to not order the appraisal if the deal isn't going to work anyway.
Well, the reason it's important to order the appraisal early is that it doesn't serve anyone if the appraisal doesn't get done on time or to be done right before closing. Then, if there's an issue with the appraisal, there's no time to react to it, and the deal may die because of failure to close. The Springfield contract also contains big, bold print at the end of the inspection paragraph that says "hey, just because you've got this inspection contingency doesn't mean that the buyer is free of other obligations" such as financing for just this reason.
It's just as important when buying any house, but especially your first one, to work with someone who knows what the contract says, to prevent issues from happening just like this.
For more information, visit us on the web at www.springfieldfirsthome.com or simply call or text us at 417.872.9222.
