Retired appraiser.

You don't need an appraisal to buy or sell a home if you are paying in full using cash. If you finance the purchase, your lender will require an appraisal. It will protect the lender and allow them to resell the mortgage into the greater bond market.

You will pay for the appraisal as part of your lending costs, the lender will own the appraisal but is required to provide you with a copy. They are not required to provide a copy to the seller. The appraisal is basically protection for the lender. They want to know that they have a reasonable chance of getting their money back if you default on the loan.

Your seller can ask you to waive the appraisal as part of your negotiations, but you can't waive it if you need a loan.

What would happen if the property didn't appraise for the contracted amount or more? If the property appraises for below the contract amount you have a couple of options. You could get out of the contract or you would have to make up the difference in price. The bank will only lend up to the amount of the appraisal, not a penny more.

Often the appraisal is used as a get out of jail free card. If the appraisal is below the selling price, it provides you with the opportunity to cancel the sale or renegotiate it.

The seller by asking you to waive the appraisal is asking you to take on the risk of having to pay more in a down payment. Are you prepared to do this? This is why cash sales are considered to be superior offers to financed offers. This is why financed offers of at least 20% are considered to be better offers than 5% down offers, easier to process, more skin in the game, fewer hoops to jump through.

Your realtor should explain all of this to you. Most sales are financed. I assume your is. You cannot waive the appraisal if you need to finance. The seller's agent should explain that to the seller. I hope this helps.

Sounds like the seller suspects that the bank’s appraisal will not match his price. In other words, he knows his price is too high.

What does this mean to you? It means the bank won’t lend you enough money. You will have to come up with more cash. More than 20% of the price.

The bank is interested in protecting its investment in your house. A bank is a business, in the business of making money. They will REQUIRE an appraisal so they know if loaning you money on this house is a safe risk for them.

I strongly suspect the seller is asking you to waive the appraisal contingency rather than the appraisal. As long as there is a financing contingency that is probably fine. It will largely provide a lot of the same protections.

I doubt the sellers really care if you or the bank do an appraisal. They just don’t want you to be able to cancel the contract because of it.