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Old 04-28-2008, 10:07 AM
 
87 posts, read 161,474 times
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Default Downpayment on a shortsale

Hypothetical question:

Will putting down 25% downpayment (no contingencies except home inspection) on a shortsale make my offer more desirable than another offer which is higher (about 3% higher with 20% (or less) downpayment, same contingencies) to a bank/investor?

In other words, does the amount of the downpayment weigh into the equation when determining if an offer is accepted?

Last edited by housewatcher; 04-28-2008 at 10:11 AM.. Reason: ... with 20% (or less)
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Old 04-28-2008, 10:12 AM
 
15,389 posts, read 19,878,432 times
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it does show you are serious. I have heard many different senario's. I closed on a short sale 2 months ago and only paid $ 1,000- as a deposit since I don't want my money tied up for a very long time. I did a 100% cash deal and that was enough to close the deal. I've heard many short sale deals are not going to go through since many can't obtain the mortgage althouth they have been pre approved.
I have even heard of a realtor who made an higher offer than another realtor on a short sale and the lower offer was excepted. Both were mortgage deals and both could close at the same time. (according to the realtor with the higher bid, she thought there was something else going on.......?)
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Old 04-28-2008, 12:30 PM
 
Location: Southwest Pa
1,009 posts, read 2,168,789 times
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The amount of a downpayment you have does play a factor. But to an anonymous lender it may just mean you had that amount stuffed in a mattress somewhere. They're looking at the overall picture. Are your qualified to close the deal, follow through to the end? What are the particulars of each offer, closing dates, contingencies and so on. That's what they're more concerned with.

The smoother it looks to them, the better chances you have to bring them to your side.
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Old 04-28-2008, 01:05 PM
 
Location: Charlotte
12,647 posts, read 8,789,233 times
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Quote:
Originally Posted by housewatcher View Post
Hypothetical question:

Will putting down 25% downpayment (no contingencies except home inspection) on a shortsale make my offer more desirable than another offer which is higher (about 3% higher with 20% (or less) downpayment, same contingencies) to a bank/investor?

In other words, does the amount of the downpayment weigh into the equation when determining if an offer is accepted?
Yes. One of the criteria the Bank will place particular weight on is the commitment in cash of the buyer. If all things are equal (credit-worthiness, time to close, etc.) among competing contracts, then your down-payment should carry additional weight among all of the contracts.
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Old 04-28-2008, 01:24 PM
 
87 posts, read 161,474 times
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Thank you for the information!
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Old 04-28-2008, 02:32 PM
 
Location: Between a Rock and a Hard Place
110 posts, read 323,727 times
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I'm confused. Is that 25% of your offer in earnest money?
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Old 04-28-2008, 02:41 PM
 
87 posts, read 161,474 times
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No, the earnest money is one thing. I'm referring to the downpayment on the mortgage.
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