Kari McCoy Realtor

06/13/2026

Should I waive the appraisal contingency?
Question:
Dear Kari,
I am trying to buy a home, and my agent has been a great source of help for me. Every home I seem to like has multiple offers and I get aced out. This is really stressing me out. My agent wants me to take out the appraisal contingency when she writes my next home offer. I was taken back with concern. Could you tell me if this practice is even legal?
Answer:
To answer your question is short, yes, it is legal to remove the appraisal contingency when making an offer on a home. It is good to know that most all purchase contracts have several contingencies as this is common practice, such as loan contingency, property investigations, seller's disclosure, title contingency and so on. The usual time frame for contingencies is from 7 to 12 days or more.
The appraisal contingency is in the purchase contract to not only to protect the lender's interest it also protects the buyer's interest. Let's face it in more situations than not, the lender has more to lose then the buyers do in the event of any default occurs on the loan.
Lenders want buyers to obtain the loan as this is their business. There are strict guidelines required for each loan process. The appraisal amount must match or be greater than the
agreed upon purchase price offer or the lender will not make the loan at all.
Multiple offers can be very competitive, and a low appraisal is every seller’s nightmare. I think your agent was trying to help your offer gain an edge to seem more appealing to the sellers. However, this could force you in the event the appraisal comes back lower than purchase
price to have you make up the difference with additional cash. If you have extra cash to put down in this situation and feel comfortable then I would agree with your agent by taking out the appraisal contingent. If you don't have the extra cash, I would never make this suggestion.
Let's look at some reasons for a low appraisal. It could be that the appraiser is from out of the area and not familiar with current market values. The appraiser could be a newbie, or the seller could have overpriced the home due to emotional ties or greed. There could be an error in placing too much value on upgraded items or selected comparable sold homes were from the wrong or lesser desirable school district.

In the event you keep your appraisal contingency some solutions to solve a loan appraisal gap might be, sellers can simply lower the price of the home equally to the appraisal value or buyers and sellers can agree to split the difference. They can also agree to pay for another appraisal or obtain a completely new lender.

My first choice would be to dispute the appraisal. This can be done by writing a letter to the appraiser and sending the lender a copy also. The letter should be polite, straight to the point and without a vicious tone. It is good to point out specifics of why the value is different in your
opinion. Offer new comparable sold homes or further information on the existing properties the appraiser selected. You may find out a home took a lower price because of a divorce or problems with the home which caused a lower selling price.
Ask the appraiser why the comparable homes were selected and if he or she would consider taking a second look at the home to refresh their memory. Because the appraiser does not have to change anything.

In conclusion sellers should consider themselves lucky when buyers are willing to look at options after a low appraisal. Some buyers will cancel the contract immediately if the appraised amount is one penny less than their accepted offer price. Keep in mind that the appraiser is only human and reflects only one person's opinion. My first choice would be to dispute the appraisal.
I hope this information was helpful.

Kari McCoy owns the Kari McCoy Group, Residential Real Estate

06/13/2026

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06/13/2026

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06/13/2026

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06/13/2026

How are a buyer's closing costs calculated?
Question:

Dear Kari,

I am going to be buying my first home, could you please tell me what other costs I will need to pay, besides the down payment money?

Answer:

Thanks for your insightful question! In California, when a property is going through the process to be sold and title transfers ownership from seller to buyer, both parties will need to pay their own closing costs in order to complete the deal, however they do not pay the same amounts and fees. Buyer's closing costs are determined by several factors such as sales price, what type of property, where in CA is the property located, property zoning, the type of mortgage loan selected, and any additional agreed terms in the purchase agreement. Generally, the closing costs for buyers are approximately 2% to 4% of the purchase price or more.

We will be looking at the typical closing costs on the buyer's side only. With the idea of obtaining a mortgage loan closing costs are referred to in two sections, non-recurring and recurring closing cost, both are paid towards the end of the sale and usually through the third-party title company.

Non-reoccurring
Escrow fees, cover the final closing paperwork and handle the exchange of funds and recordings.
Owners title insurance policy is to protect the new owner from title problems
Title insurance fees, include costs for the title search, title examination, title insurance, document preparation and protects buyer and lender against is someone changeless the title
Notary fee, is payable to the notary for their help with signing services.
Recording fee, is charged by a government agency for recording the new deed of trust.
Transfer taxes, are charged by the county and or city or both in some areas to change ownership.
Home inspection fees, for professionals in the trades to assess any issues or problems with regards to all aspects of the home.
Origination fee, lenders charge an origination fee for establishing your loan.
Application fee and credit fee, as part of the application process, your lender will check your credit.
Mortgage points, extra option paid to lender to lower your interest rate. Each point equals one percent of the total loan amount.
Additional lender fees and costs.
Appraisal fee, lenders require home appraisals to ensure a home is worth what they’re loaning you.
Wire transfer fees, transferring funds to pay the balance on your mortgage.


Recurring

Mortgage payments, interest will be prorated with upfront fees, from the day your mortgage closes until the end of the month in which your loan closes.
Property taxes are based on the purchase price paid for the home, and buyers might be required to prepay property taxes from 2 to 8 months, depending on certain circumstances required by the lender.
Private Mortgage Insurance (PMI) might apply when buying a home with less than 20% down payment. This fee protects the lender against loss due to foreclosure.
Homeowners association fees, If you’re buying a home that’s located within an HOA, you might be required to pay prorated fees.
Home owner insurance premium, one year is required paid up front.
Flood or wild fire insurance will need to be paid up front for one year if applicable.
Mello Roos tax, allows a county, city government, or school district to sell bonds to fund new or additional community facilities and charge homeowners, if applicable.
Now we can understand that there are several possible buyers' closing costs. Be wise to work with a qualified, well-versed real estate agent that you trust, he or she can guide buyers through today's complexed home buying process, from the beginning to end, providing the best options and choices for a successful home sale.

I wish you the best in your home purchase!

06/13/2026