ALL INCLUSIVE TRUST DEED:  An All Inclusive Trust Deed (AITD) is a new deed of trust that includes the balance due on the existing note plus new funds advanced; also known as a wrap-around mortgage. A wrap-around mortgage, more-commonly known as a “wrap”, is a form of secondary financing for the purchase of real property.


My seller would like to add a "landscape incentive"  or "landscape allowance"  to the listing for $2,000.  Can I put this information in the property description of the listing?  Does the listing paperwork need to be updated? 

Yes - it can be added.  But if the buyer is getting financing - it will most likely be a problem.  This CREDIT would be subject to lenders approval.  I would suggest reducing the price or offering seller concessions by the amount of the allowance.   TM




APPRAISAL IS AN OPINION OF VALUE:  If I get an appraisal of a listing prior to listing to I have to disclose the appraisal information in MLS?  No, an appraisal is an opinion of value and there is no legal obligation to disclose it.  See section 5b, line #201 of the purchase contract.

APPRAISAL, MUST BUYER GIVE A COPY TO THE SELLER?  Q: The listing agent put in the counter offer that the seller wants the buyer to supply the appraisal to the seller upon request.  The buyer is paying for the appraisal.  Must the buyer give the seller the appraisal?  We are concerned that the seller will not complete repairs and may try to cancel the transaction.  A: There is no provision in the pc that says the buyer shall furnish the seller with a copy of the appraisal.  That being said, if the buyer agrees, then the buyer will be obligated to provide a copy of the appraisal to the seller.  Otherwise, the buyer just needs to disclose that the appraisal “came in at value.”

APPRAISER:  Make sure the Appraiser has the geographical knowledge (local market expert).

APPRAISAL, ADDITIONAL APPRAISAL REQUIRED BY LENDER:  “If an additional appraisal is required by the lender, and said appraisal comes in lower than agreed to sales price, buyer agrees to make up any difference required by lender.” 

APPRAISAL, WHEN IS IT COMMUNICATED TO THE BUYER:  In my experience, there's often no indication from a buyer's lender that an appraisal result has been communicated to the buyer.  Short of calling the lender to find out if they've provided the appraisal results to the buyer, is there a way to solidify the date that starts the contingency clock for the buyer?

You're right Jon, and the answer really is no.  Other than doing what you described and calling the lender, there's no definitive way for you to know that exact day.  KF

APPRAISAL LOW ON VA, FHA, CONVENTIONAL LOAN, BUYER PAY DIFFERENCE (override amendatory clause):                

“All parties are aware that the (LOAN TYPE) Appraised Value is $xx, and the Sales Price is $yy.  Seller and Buyer Acknowledge and Agree that Buyer will pay the Purchase Contract Sales Price of $yy and that the Buyer will pay the difference required by lender of $zz at closing to meet the Contract Sales Price.”

APPRAISAL CONTINGENCY STILL VALID ON CASH TRANSACTION:  “Appraisal Contingency on page x, line #x of this PC to still be valid if Buyer elects to have property appraised.  If Appraisal is ordered, it is to be completed during the Inspection Period.” 

APPRAISAL, LOW APPRAISAL, PAY $1000 ABOVE APPRAISED VALUE LANGUAGE                                                                                                “In the event that the Premises fails to appraise for the purchase price in any appraisal required by lender, buyer agrees to pay up to $1,000.00 above the appraised value, to a maximum of the purchase price on line 8.”


Appraisal exists at $x.  Buyer agrees to pay any difference between the sales price and the appraised value as required by the lender.


APPRAISAL, SELLER REDUCE CONCESSIONS IF CONCERNED ABOUT POSSIBLE LOW APPRAISAL LANGUAGE                                   Seller and Buyer agree that if the home fails to appraise, any buyer requested reduction in the sales price as a result of the appraisal will be offset by a corresponding decrease in seller concessions.

APPRAISAL, BUYER MAINTAIN CONCESSIONS IF CONCERNED ABOUT POSSIBLE LOW APPRAISAL LANGUAGE                                   Seller and Buyer agree that if the home fails to appraise, any buyer requested reduction in the sales price as a result of the appraisal will be not be offset by a corresponding decrease in seller concessions.


Sales price to be reduced to the appraised value of $x...or...Buyer and Seller agree to a reduced sales price of $x….or….Seller and Buyer hereby agree to amend the purchase price to reflect the appraised value of $x.”


APPRAISAL, HOW TO CONTEST?  Hi Laurie.  You must convince the lender that the appraisal has incorrect or erroneous information.  The lender would call for a new appraisal if they thought it was necessary and you could convince them the current appraisal is flawed.  That is a very difficult thing to do unless there are obvious errors or mistakes.  For example, appraisal states no upgrades in 14 years, yet seller has receipts showing $10K in upgradesl…Call the lender and voice your concerns to them and see what they have to say, that is the beginning of that process.

CASE STUDY:  Now the Appraisal came in $4000 short.  The seller put $8600 in upgrades in the condo and was given zero for upgrades even when provided the invoices and receipts.  My seller spent 5 weeks working from California with the contractor here to update the property, which was needed. My question is if the buyer is not willing to pay the $4000 difference and the seller will not come down $4000  (and does not close escrow) and we put it back to Active Status, my seller is asking if the appraisal be put in the system for future appraisers to see?

I don't believe there's any database for past appraisals other than for FHA loans.  An FHA appraisal sticks with a property for 6 months, but that's not true for conventional loans, so if it was conventional I don't think you'll have a problem.  Also, just an FYI, the Buyer only has 5 days to decide if they want to move forward or cancel from the day they received the appraisal information.  If they go past that 5 days, and then try to cancel based on the appraised value, they would be putting their EM in jeopardy.  KF

The lender is contesting the appraisal with information I provided to him.  I assume we have to wait on the response from the Appraiser?  It consisted of $8600 of upgrades the seller had done, but the Appraiser stated there were “no updates in the 14 years” the seller owned the property.  Judy

Technically the appraisal contingency doesn't automatically extend for the review of the appraisal.  If you were on a Buyer side, I would say you need an addendum signed by the parties extending the appraisal contingency. 

I sent the upgrades & receipts a second time to the appraiser and he adjusted the price up to the purchase price.  I really appreciate your help and direction.  Yeah Team.    Well done Judy!  It's rare that they actually change it, so it's good to hear that it does happen sometimes :)

I shared with the seller that exact statement when the Appraisal issue occurred. I have found that is correct from my experience. Very surprised, but he did not consider the upgrades so it worked.  So happy!  Appreciate the advice as to the number of days buyer has to make decision and otherwise an addendum would be needed to extend the time.


My clients are first time buyers who do not have extra funds to bring in.  The seller wants to CHALLENGE THE APPRAISAL and refuses to lower the price.  I am wondering what type of paperwork I should complete to protect my clients as this will take them outside the contingency period.  Thanks in advance for your help,  Bob.   HI Bob, I'd do an addendum (and make sure it's fully executed during the contingency period) that states:

“Buyer and Seller agree to extend the appraisal contingency time frame to allow for the appraisal to be Contested.  In the event the appraisal review does not result in the appraisal amount being increased to at least the purchase price, the Buyer shall have the right to cancel the contract with a full refund of the earnest money within 48 hours of notification.  If appraisal challenge is successful and appraised value comes in at or above purchase price, buyer agrees to waive appraisal contingency and proceed with this transaction”.

‘Buyer and Seller agree to extend the appraisal contingency time frame to allow for a Second Appraisal.  In the event the second appraisal does not result in the appraisal amount being increased to at least the purchase price, the Buyer shall have the right to cancel the contract with a full refund of the earnest money within 48 hours of notification.  If second appraisal value comes in at or above purchase price, buyer agrees to waive appraisal contingency and proceed with this transaction.”        Something along those lines should suffice.  KF

FHA questions: What is the proper way to notify FHA buyer 2 that a prior FHA APPRAISAL has been completed and is within the 120 day stick period? Counter offer? Addendum? Does buyer #2 have to pay for this prior appraisal? Is the seller wrong to offer FHA if they are listed above the prior FHA appraisal? (they could ask buyer to pay difference out of pocket since the buyer is going to find out). Just trying to be sure how to handle this situation. Thanks, Jeff.

Good morning.  Has the FHA appraisal already been paid for by the original FHA buyer?  Yes it has, the deal fell apart due to the low appraisal, seller did not want to lower price.  Are you listing it at the FHA appraised value?  No, higher, they are hoping a conventional or cash deal comes in. 

I would counter any FHA offers stating an FHA appraisal exists at "$x" value and borrower will be required to pay "$y" in cash (if they are offering more than the FHA appraised value).  That would hedge off a deal falling apart later on.   Jeremy House

APPRAISAL, WHAT IF YOU FORGOT TO INCLUDE AN APPRAISAL CONTINGENCY WITH YOUR CASH OFFER?  You can still cancel on Due Diligence, sect 6a, line #215, determining VALUE is included in inspection! 


Appraisal Waivers

Fannie Mae has also expanded the availability of appraisal waivers, to be used for both home conventional home purchase loans and refinance loans.  Everything starts with Fannie Mae's desktop underwriting system, which analyzes data on properties and will now potentially issue a waiver of appraisals on the following type of transactions:


1)      Home purchase loans for primary and secondary homes with a minimum 20% down payment.

2)      Rate and term home refinance loans up to 90% loan to value on primary and secondary homes and 75% on investment property homes.

3)      Cash out refinance loans up to 70% loan to value on primary homes and 60% on secondary and investment property homes.


The waivers are not guaranteed, but are definitely being issued on many transactions that meet these qualifications currently and will continue to grow as Fannie Mae continues to expand its database of appraisal numbers.


As always everyone's individual situation is unique and it is always best to speak with a licensed lender to explore all available home loan options, for your specific situation.


APPRAISAL:  “Should the property fail to appraise at the sales price, buyer agrees to pay up to an additional $10K over the appraised value.”

APPRAISAL, WAIVE APPRAISAL:  You can include this language if your sellers are ok with it...anytime we start to use an escalation clause, there is always a chance of having the price "bid up" to the point where the appraisal might become a concern.  This language resolves that. 

“Buyer(s) agree to waive the appraisal contingency.  Should the appraisal come in below the contract sales price, Buyer(s) agree to pay any difference between the sales price and the appraised value as required by their lender.”

APPRAISAL:  Q: I have a client that really-really likes this property in “Estrella Mountain” and the asking price is about $289k.  The husband of my client told the wife hey maybe we should just offer up $300k to make sure we win this property. I wanted to get a brokers opinion on this because I’ve personally never had an offer this much above asking price. Is it normal, is that a little too high, or on a home in that area which is pretty desirable and under $300k goes so fast is this somewhat viewed as being acceptable?  Before I have them sign and send the full offer to listing agent I definitely wanted to run this by a broker.  Thanks in advance,

A: When you offer above asking price, you run the risk of the property not appraising.......the biggest issue if there's a loan involved.

You will need to take a close look at the comps and the amenities this property has to make sure that kind of offer makes any sense and advise your clients accordingly.

ARMS LENGTH TRANSACTION:  HAFA SHORT SALE DISCLOSURE/ADDENDUM:  (SEE HAFA AFFIDAVIT)  If Agent is buying on his/her own behalf, they are not allowed to be paid a commission as per the terms of the HAFA Affidavit which all parties must sign.

FYI: This is not an arms length transaction due to the agent being the buyer.  If the lien holder sends an arms length transaction form to sign, be sure to get it approved by a broker prior to signing.  Be sure you notify the broker that the buyer is also the agent.  Thank you.

Grace Hopper. It's easier to ASK forgiveness than it is to get permission. Rear Admiral Grace Murray Hopper (9 December 1906 – 1 January 1992) was a U.S. Naval officer, and an early computer programmer.

ARS 33-1228:  Q: If you don't know could you possibly direct me to someone that could clarify. The president of the association sent this to me for my opinion.  A: Hi XYZ, that is true.  I have only heard of it happening once or twice, but it can happen.  The Arizona Condominium Act (ARS 33-1228) allows for an HOA to disband if 80percent of the members agree to it.  

Here is the link to the ARS website and ARS 33-1228:


To be clear, we can't write the assignment language itself, but this verbiage should be included in the final product:

“Seller and Buyer acknowledge and agree that the purchase contract dated xx/xx/xxxx is being assigned to YYY, and by signing below YYY acknowledges that she/he has read, approves and signed the purchase contract, addenda, and all related documents including the Buyer Broker Employment Agreement and agrees to be bound by same as if she/he were an original signer on each and every document.”  

ASSIGNING CONTRACTS, Legality in Arizona

ASSIGNMENTS (how they work)


ASSIGNMENT LANGUAGE WHEN SELLING FOR A PROFIT:  (MUST DISCLOSE WHEN SELLING FOR A PROFIT)                                                                                                                    “Seller and Buyer Acknowledge and Agree” OR Seller acknowledges that ____ is entering into this purchase contract for the sole purpose of obtaining legal interest in order to further market the property for sale.  Buyer shall have the right to cancel this purchase contract  at any time without cause and without recourse above and beyond any Earnest Money provided for on line #x.” 

“Buyer(Agent) intends to acquire legal, equitable title in order to Sell at a Profit.”


“Seller agrees to allow xyz LLC to advertise the property and enter into a resale agreement during the escrow period.  Seller acknowledges that a member of xyz LLC is licensed in the state of Arizona.  Buyer waives SPDS and CLUE Report.  Buyer agrees to pay all Seller’s escrow closing costs except any cost incurred to provide marketable title.  Seller shall be responsible tor all unpaid taxes, utilities, liens, judgements or fines attached to the property.  Close of Escrow shall be on the date stated on line #x, or earlier with written mutual agreement between the parties.  Seller agrees to release Earnest Money back to the Buyer at any time that the contract is cancelled within the inspection period or if the Title Report reflects undisclosed clouds on title that inhibit the transfer of good title.”


ASSIGNMENT:   Q: Hi - I have a ratified contract for my buyer Tom to buy a property.  Tom now wants to assign the contract to his brother Dan.  Tom will now be lending Dan 100% of the purchase price to buy the property.  Who signs the contract amendment?  Dan, Tom or both?      A: Patrick, assignor and assignee typically sign an "assignment" agreement with the terms of the assignment.  That could be for a fee, or just an assignment statement whereby the contract is being assigned from one party to another.  Some title companies will prepare the assignment documents, you would have to ask the title co you are working with if they would prepare those.  That could also include the seller signature acknowledging the assignment.


AS-IS ADDENDUM:  The lines in the AS IS Addendum don’t even match up with the Purchase Contract anymore FOCKER!

AS-IS:  If a buyer writes “AS-IS” in their offer, they can still go through the BINSR process, and cancel or ask for repairs after the inspection.  However, if buyer writes “No repairs will be requested” or “Waives Inspection”, then they should not be able to “cancel” on the BINSR!  Saying “AS-IS” does not mean anything unless there some teeth in it!

AUCTIONS:  Q: Does my real estate license allow me to assist a buyer with a purchase at auction and negotiate a commission or referral?  A: Yes you can.  However chances are the auction will not allow you to be a party to the contract.  You will need a separate employment agreement (Buyer Broker Employment Agreement) as the buyer will usually have to pay.   On the buyer broker write in that if the buyer purchase a property at auction the buyer will  pay a consultation fee of  $X.  Jenny.

AUDIT:  An ADRE Audit is a Public Report and will be kept on file for at least five years.

AUTHORIZED SIGNER:  Q: I'm doing a Listing appointment today for a Canadian Corporation. What documents will I need to get for authority to sign?  A: There should be some document such as an operating agreement that the Corporation has which will authorize someone to sign on behalf of the Corporation in order to sell real property.  You may always send that documentation to the title company for verification that this is all that is needed to list and sell the property.  If not you will need all the parties to sign.  Yes, the title company will take care of the requirements for FIRPTA.  Please make sure that any offer that is received has the buyer is aware that FIRPTA will apply.