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Before my questions, here's the scenario: Found a house that meets our criteria. Offered 93% of listing price. Next day the price dropped $20k bringing our offer to 97%. The seller's agent said she needs more evidence than our pre-approval letter that we are qualified. My lender spoke with her about our FHA loan, and she asked for proof of income and credit reports. We decided to "play the game" and had my buyer broker fax her the first page of each our credit reports, showing our excellent credit scores, and disclosed our combined gross annual income. Then I'm told there is concern about the fact that we are financing the closing costs, since the contract price may end up more than the appraised value. So, we advised that my parents are willing and able to gift us $10k to help cover the difference. The only response we've gotten (she is suspiciously unavailable) is that the seller has not been comfortable getting into a deal that has a seller's concession. At this point we're not even sure if our offer is still under consideration.
First of all, why rolling in the closing costs is called a "seller's concession" still doesn't quite make sense to me. Regardless, I feel like the seller is a bit overly concerned with our finances. I understand the worry about the deal not going through because of an FHA appraisal, but should this prevent them from going forward with us? It seems home buyers are truly at the mercy of sellers and their agents. Should I just assume they are waiting for a cash deal and move on?
You're at nobody's mercy. In fact, it is the opposite. If you aren't comfortable with the deal, just walk. Regarding closing costs, if a house is price at 100k and you offer 95k plus seller pays 2k closing costs, that is a 93k offer in the mind and reality of the seller. So closing costs are a concession.
I understand the seller's concern about the contract not working out, lots of time no-money-down type situations fall through. If I were the seller and I had a 95% offer with traditional financing and a 97% offer with FHA, I'd go with the lower offer that had the traditional financing.
As far as I'm aware there wasn't a request for the seller to pay anything in our offer. Is it typical for a buyer to get a copy of what the broker sends to the seller? I asked earlier this year, after putting in an offer on a different house, but they quickly informed us about a bidding war and I never saw the paperwork. There are very few single-family homes in the neighborhoods we're searching (let alone detached and maintained). And one that is within our financial comfort zone is even more rare. So, finding another house is a nice idea, but not certain. I think I'd be happy to go through any amount of hassle if I knew that I had a fair chance in this process. Everyone in real estate is out to get the best for themselves. I guess that's why its okay to just walk away from a deal. But in the end aren't we all negotiating with big numbers, life's circumstances and lengths of time? The whole system sucks.
As far as I'm aware there wasn't a request for the seller to pay anything in our offer. Is it typical for a buyer to get a copy of what the broker sends to the seller? I asked earlier this year, after putting in an offer on a different house, but they quickly informed us about a bidding war and I never saw the paperwork. There are very few single-family homes in the neighborhoods we're searching (let alone detached and maintained). And one that is within our financial comfort zone is even more rare. So, finding another house is a nice idea, but not certain. I think I'd be happy to go through any amount of hassle if I knew that I had a fair chance in this process. Everyone in real estate is out to get the best for themselves. I guess that's why its okay to just walk away from a deal. But in the end aren't we all negotiating with big numbers, life's circumstances and lengths of time? The whole system sucks.
If you offer $100 and plan to finance $3 of closing costs, the house has to appraise at $103 for your deal to work. The sellers are afraid that if the house appraises at $100 you will come back to them and ask for a concession of $3 to make your deal work. So while you are not currently asking for concessions, they think that there is the possibility that you will wind up asking for them in the future.
As far as I'm aware there wasn't a request for the seller to pay anything in our offer.
It's your offer and you don't know?
Is it typical for a buyer to get a copy of what the broker sends to the seller? I asked earlier this year, after putting in an offer on a different house, but they quickly informed us about a bidding war and I never saw the paperwork.
Were you not required to sign the offer before it was submitted to the seller, for consideration?
You are entitled to copies of all contracts.
If you did not make a written and signed offer, it's just noise.
There are very few single-family homes in the neighborhoods we're searching (let alone detached and maintained). And one that is within our financial comfort zone is even more rare. So, finding another house is a nice idea, but not certain.
Many folk focus on national trends and do not appreciate that not all markets favor the buyer, right now.
I think I'd be happy to go through any amount of hassle if I knew that I had a fair chance in this process.
NYC is highly regulated.There are laws that spell this out.
Everyone in real estate is out to get the best for themselves.
Most everyone in everything is out to get the best for themselves. Real estate is no exception.
I guess that's why its okay to just walk away from a deal. But in the end aren't we all negotiating with big numbers, life's circumstances and lengths of time? The whole system sucks.
Do you have your own agent or are you working firectly with the listing agent, who represents the seller's best interests? Is your real estate agent an independent broker or affiliated with a broker?
It's time for you , your agent and your agent's managing broker to sit down and have a conversation. It is not clear if you require a better understanding of the process of if someone is playing a game. Sounds to me like you are in pre-contract negotiations and nothing is binding at this point.
From a seller's perspective, they do not want to take their home off the market unless there are reasonable assurances that you can close on the transaction. There is nothing wrong with or greedy about this.
[SIZE=3]Got a copy of the contract and it is exactly how it was explained to me. We have a broker from an exclusive buyer agency on retainer. It was a written offer, signed on our behalf. We now have a real estate attorney as well. I understand that people are, generally speaking, self-serving. And I appreciate the seller’s perspective. Who knew pre-contract negotiations could seem so unreasonable. [/SIZE][SIZE=3]That said, we were told our offer was no longer under consideration because another had come through… one with 20% down.[/SIZE]
[SIZE=3]But wait, that fell off the table and the next day we were asked to apply for a mortgage from the seller’s agent’s lender. Supposedly we can go with whomever we choose (ie: the bank with the least fees) after sending all the paperwork for processing and being approved by them too. Had the inspection, and everything looks good except: a small flashing repair where the roof meets the siding and *gasp* asbestos in the basement! Our broker is saying they’ll probably fix the leak at the corner of the house but the sellers have lived with the asbestos for so many years it's unlikely that they’ll negotiate over it. So now, not only am I concerned with the value an FHA appraiser assesses but what he/she will say about that. I read that people have trouble receiving HUD funding because of something as insignificant as peeling paint on a shed 15 feet from the house. Apparently the bars on the windows of this house are a fire hazard therefore illegal. Should we remove them ourselves in advance? Does anyone know about the asbestos issue? Would the appraiser take into account that the engineer’s report shows high marks everywhere else? Sorry, I haven’t done much research on this step yet, but plan to. Thanks in advance for any input.[/SIZE]
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