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I recently put a full price offer in on a home. Included in my offer was a preapproval letter indicating I was working with a reputable lender and that I was putting approximately 75% of the purchase price down. In other words, a very solid offer.
Unfortunately, the seller and her agent chose a different buyer's offer. I don't have the exact specifics, but this buyer is putting very little down and offered $10,000 more than the asking price. Now, this buyer is having issues securing financing and the appraisal came in below their offered price.
I am wondering if this is a tactic used in a sellers market where a buyer rushes in and offers more than the asking price just to have their offer accepted first...even though their financing is shaky and it's likely the house will appraise low.
I have a backup offer that is now being considered, and I have my fingers crossed. I'm just a little miffed that a solid buyer like myself was moved into 2nd position because the other buyer is playing these "games."
Is this some kind of sleazy tactic a buyer will use just to get their offer accepted first??
Just the reality of a seller's market. With how hot the Vancouver, WA market there are above asking cash offers put in same day the place is listed. Competing with that is tough.
Seller just wanted the most money for the property. Now that they know the appraisal number they know what that is unless they can get someone to cough up cash on top of that, which is also happening here.
Some buyers might.
It is an expensive gambit if one is playing a game.
But, did the appraiser do a good job? Is the appraisal opinion reasonable?
Plenty of sales are closing at 5% and 10% down, and even at 100% funding.
While your offer was strong, if the other offer was well-crafted it would appeal to most sellers.
>If there is financing on both offers it is no concern of mine how much they are putting down. I would take the higher offer.
Not me, not necessarily. A buyer that can demonstrate enough cash for a large down payment is more likely to get a mortgage...because LTV is more favorable...there is more buffer in case of a low appraisal...
Before taking any offer I ask...who are the buyers...what do they do for a living...do they seem to be stable jobs...how old...is it a first house...
I don't want a letter about their emotional state, I want to be sure of their financial state.
I don't think it's sleazy. I think it's smart. I am in a sellers market, and recently got 2 offers over asking price and one just at asking price. I have no idea if my agent told the 2 higher ones what the others were, or if it was just a coincidence. It sucks for a buyer, but that's just the way it is in the current market here.
I recently put a full price offer in on a home. Included in my offer was a preapproval letter indicating I was working with a reputable lender and that I was putting approximately 75% of the purchase price down. In other words, a very solid offer.
Unfortunately, the seller and her agent chose a different buyer's offer. I don't have the exact specifics, but this buyer is putting very little down and offered $10,000 more than the asking price. Now, this buyer is having issues securing financing and the appraisal came in below their offered price.
I am wondering if this is a tactic used in a sellers market where a buyer rushes in and offers more than the asking price just to have their offer accepted first...even though their financing is shaky and it's likely the house will appraise low.
I have a backup offer that is now being considered, and I have my fingers crossed. I'm just a little miffed that a solid buyer like myself was moved into 2nd position because the other buyer is playing these "games."
Is this some kind of sleazy tactic a buyer will use just to get their offer accepted first??
I doubt it was a sleazy tactic, I just think the buyer really wanted this house. Probably they were aware there were multiple offers and they decided to go high to improve the odds they would get the house. Quite possibly they've recently lost other houses to competing buyers who bid more than full price so this time they went over asking to improve their odds. I also doubt they knew they would have difficulty obtaining financing - usually buyers are taken by surprise when this happens. Even when it seems like they should have known they would have issues usually buyers seem to have no clue.
Unfortunately you're in a sellers market and things like this are going to happen. It seems like there's a good chance you will end up with this house anyway; if not at least you're in a financial position to be able to bid above asking the next time around.
As to what offers a seller will take - it depends on how savvy they are, how greedy they are, and how desperately they need the sale to close by a certain date. Some will take the highest dollar amount without considering the details. Some will be smart enough to know that highest isn't always best and consider other details besides price. Some will take a lower all cash offer just to insure that the sale closes quickly. In your situation, there probably wasn't much risk to the seller to take the higher offer because they have at least one other offer (probably multiple other offers) in line if the first doesn't work out and they obviously aren't under a significant time pressure to sell.
I doubt it was a sleazy tactic, I just think the buyer really wanted this house. Probably they were aware there were multiple offers and they decided to go high to improve the odds they would get the house. Quite possibly they've recently lost other houses to competing buyers who bid more than full price so this time they went over asking to improve their odds. I also doubt they knew they would have difficulty obtaining financing - usually buyers are taken by surprise when this happens. Even when it seems like they should have known they would have issues usually buyers seem to have no clue.
If they have a decent agent they should have a clue. I always got my buyers at least pre-qualified. Just to prevent my time being wasted if nothing else.
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