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Old 01-19-2010, 06:21 PM
 
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Hi all

Recently we make an offer in a house, our Realtor told us that the house has another bid besides us. We were told that our offer is higher, but the other family have more money for down payment. What does this mean?

I am confuse, any opinions are welcome.
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Old 01-19-2010, 06:38 PM
 
Location: Hoboken
19,891 posts, read 9,501,331 times
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Quote:
Originally Posted by Sweetie_9 View Post
Hi all

Recently we make an offer in a house, our Realtor told us that the house has another bid besides us. We were told that our offer is higher, but the other family have more money for down payment. What does this mean?

I am confuse, any opinions are welcome.


I think it means that the seller has more confidence that the competing bidder will have less difficulty getting a mortgage thus more likely to close without a problem.
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Old 01-19-2010, 07:22 PM
 
Location: NJ
1,694 posts, read 3,870,065 times
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Originally Posted by shorebaby View Post
I think it means that the seller has more confidence that the competing bidder will have less difficulty getting a mortgage thus more likely to close without a problem.
Agreed, especially if the seller is in a rush to sell.
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Old 01-19-2010, 07:23 PM
 
21 posts, read 31,372 times
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But we have been pre-approved for more than the amount we offered, although I don't know if our realtor has mention anything about that.
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Old 01-19-2010, 07:27 PM
 
Location: NJ
1,694 posts, read 3,870,065 times
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Originally Posted by Sweetie_9 View Post
But we have been pre-approved for more than the amount we offered, although I don't know if our realtor has mention anything about that.
But usually the pre-approval letter is only based on the amount of money you told the mortgage company you have. At the time of pre-approval they don't verify that you actually have the sufficient funds.
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Old 01-19-2010, 07:38 PM
 
21 posts, read 31,372 times
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So, that means there is nothing I can do, but wait and see.
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Old 01-19-2010, 07:43 PM
 
Location: Hoboken
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What percent are you putting down?
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Old 01-19-2010, 07:55 PM
 
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I am a first time home buyer that will be using FHA loan.
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Old 01-19-2010, 08:03 PM
 
Location: Northern NJ
3,302 posts, read 3,126,427 times
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Originally Posted by Sweetie_9 View Post
I am a first time home buyer that will be using FHA loan.
You are at a big disadvantage if you are going FHA with 3% down compared with a buyer who is putting down 20% and using conventional financing. Most sellers will pick the bigger down payment because there is less chance of a mortgage problem with people who are putting down more money. Even if you bid more than the other party, the fact that they are a stronger buyer often causes a seller to choose them over you. Have your agent keep your offer on the table as a backup offer and hope the deal falls through for some reason. You have to hope to get lucky. In the mean time, you are going to have to find another house.

Another problem with FHA financing is that they are stricter with respect to the house. FHA appraisers often find items that need to be corrected before the deal can close. Those items usually end up having to be paid for by the seller. So most sellers would prefer to sell to a buyer who is not going FHA, all other things being equal.
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Old 01-19-2010, 08:22 PM
 
Location: Hoboken
19,891 posts, read 9,501,331 times
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Be patient, don't fall in love with any house. You will eventually find a house that is right for you. It may turn out to be this house. Good luck!
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