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Old 06-09-2018, 09:02 AM
 
Location: New Yawk
8,657 posts, read 4,804,337 times
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Quote:
Originally Posted by prospectheightsresident View Post
I think there's some fear that you may not be able to cover any gap if the house appraises for less than asking price and your current down payment is insufficient to make up the difference. In that case, the other bid may have been seen as the safer bet.
I hadnít thought of that, but it makes sense. Especially when there are multiple offers that are very similar, there needs to something to break the tie.
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Old 06-09-2018, 09:30 AM
 
Location: Rochester, WA
3,842 posts, read 2,071,903 times
Reputation: 10597
If we are going to talk about this from a financial health or economic standpoint, i.e. as a "moral" issue... we need to separate some of these issues and consider some more perspectives before making any potentially untrue assumptions buyer's financial health from their use of cash in their home buying decision. When assessing what they're bringing to the table, consider down payment, closing costs, and if you know it, other investment they plan to make in the property.

Look at the big picture. Is this a first time buyer, buying a starter home, who is asking for everything... zero down AND seller-paid closing costs? If so, then yes, perhaps they are at the absolute max of what they can afford, and you can use that to consider the strength of their offer and their ability to close it.

On the other hand, consider this alternative reality... VA buyers who were buying a luxury home with zero down because interest rates were really low and they could make more income from that money invested in the stock market, than they would gain in equity owning the home. These were wealthy people who could have probably bought the home cash but the low cost of borrowing was too good to pass up. They were paying their own closing costs because they wanted to be competitive with their bid, but they were not putting any more cash down on the home than they had to. Why put a bunch of money down when they are paying 3.5% interest on the mortgage, but making 6-8% from that same money invested? It would be foolish to reject their offer because of down payment. Big picture matters.

Other situations I've seen were also well qualified buyers who were buying a home well under their budget intending to put a LOT of money into rehabbing it, and/or putting in a barn, arena and fencing for horses immediately after purchase. They were saving their cash for THAT... putting as little down as possible. Again, not people who could barely afford the home... people using their money wisely.

I'd just advise, if you want to assess the whole situation, try to find out a little more about what they buyers actually have, to make sure you're not missing something important. Have your realtor talk to the other realtor, and also to the lender who wrote the approval. They can't always tell you a LOT, for confidentiality reasons, but they may be able to tell you enough to correctly assess the whole situation.

Last edited by Diana Holbrook; 06-09-2018 at 09:38 AM.. Reason: typos and grammar. ;-)
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Old 06-09-2018, 11:06 AM
 
Location: Cary, NC
31,661 posts, read 55,447,685 times
Reputation: 30200
Quote:
Originally Posted by Diana Holbrook View Post
If we are going to talk about this from a financial health or economic standpoint, i.e. as a "moral" issue... we need to separate some of these issues and consider some more perspectives before making any potentially untrue assumptions buyer's financial health from their use of cash in their home buying decision. When assessing what they're bringing to the table, consider down payment, closing costs, and if you know it, other investment they plan to make in the property.

Look at the big picture. Is this a first time buyer, buying a starter home, who is asking for everything... zero down AND seller-paid closing costs? If so, then yes, perhaps they are at the absolute max of what they can afford, and you can use that to consider the strength of their offer and their ability to close it.

On the other hand, consider this alternative reality... VA buyers who were buying a luxury home with zero down because interest rates were really low and they could make more income from that money invested in the stock market, than they would gain in equity owning the home. These were wealthy people who could have probably bought the home cash but the low cost of borrowing was too good to pass up. They were paying their own closing costs because they wanted to be competitive with their bid, but they were not putting any more cash down on the home than they had to. Why put a bunch of money down when they are paying 3.5% interest on the mortgage, but making 6-8% from that same money invested? It would be foolish to reject their offer because of down payment. Big picture matters.

Other situations I've seen were also well qualified buyers who were buying a home well under their budget intending to put a LOT of money into rehabbing it, and/or putting in a barn, arena and fencing for horses immediately after purchase. They were saving their cash for THAT... putting as little down as possible. Again, not people who could barely afford the home... people using their money wisely.

I'd just advise, if you want to assess the whole situation, try to find out a little more about what they buyers actually have, to make sure you're not missing something important. Have your realtor talk to the other realtor, and also to the lender who wrote the approval. They can't always tell you a LOT, for confidentiality reasons, but they may be able to tell you enough to correctly assess the whole situation.

Sure.
But, why go to all that effort when it is easy to claim moral superiority on the basis of summarily judgmental discrimination?

VA Loans don't have a high failure rate leading to foreclosure. In 2013, VA loans had the lowest foreclosure rate of all types of loans in the market.
VA Loans close.
VA Loans make housing available and affordable.

And, these Americans have earned the benefit.


https://www.blogs.va.gov/VAntage/199...an-homebuyers/
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Old 06-09-2018, 11:14 AM
 
1,781 posts, read 883,640 times
Reputation: 3813
Quote:
Originally Posted by MikeJaquish View Post
Sure.
But, why go to all that effort when it is easy to claim moral superiority on the basis of summarily judgmental discrimination?

VA Loans don't have a high failure rate leading to foreclosure. In 2013, VA loans had the lowest foreclosure rate of all types of loans in the market.
VA Loans close.
VA Loans make housing available and affordable.

And, these Americans have earned the benefit.


https://www.blogs.va.gov/VAntage/199...an-homebuyers/
Ah so ok. You would totally drop a seller who had multiple offers and chose a buyer who put some money down, or paid in cash. And forgo a substantial commission. Yes I see.

Again, VA loans are not the only ones that don't require a down payment. Pot meet kettle on the morally superior chest beating.
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Old 06-09-2018, 12:15 PM
 
209 posts, read 97,594 times
Reputation: 384
Quote:
Originally Posted by desperatedogadvice View Post
We have been lucky with real estate sales. Multiple offers on every home we have ever sold in quick turn around of listing. And as this is the case, we have our pick of buyers. We always look for (in order of preference) 1) full price or over listing cash offer 2) full price or over listing conventional loan with at least 20% down 3) everything else. My husband is very leery of any kind of loan with 0% down.

I got to wondering if this is just a quirk of his or if other sellers also view a no money down loan as a red flag. And really, is that fair to a buyer? How do others view this?
We had choices: 1) A guy willing to buy our house pre being on the market for 7k less and no agents. 2) An offer 5k above asking price with 20% down. 3) An offer 15k above asking with 5% down. We chose door #2. Consequently, nothing worth noting was found on the inspections (weren't asked for a dime). With #3, they would've seen stuff and we fixed the house enough over the years and weren't willing to take a chance on people who could only put down 5%. Too risky especially because we didn't have our house appraised (did the research and thought it was in the right range).

0% down is going to keep out buyers but 0% down may well hurt you. No money if items come up on inspection - you'll pay for them. No money of something happens to the house when they buy it. People shouldn't buy houses they can't afford. If lenders won't stop them, you can. Greedy mortgage lenders caused GWB's stupid crash and don't forget - one of the things in this regime's cabinet has the nickname of foreclosure king. They're waiting.
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Old 06-09-2018, 12:16 PM
 
Location: Cary, NC
31,661 posts, read 55,447,685 times
Reputation: 30200
Quote:
Originally Posted by emotiioo View Post
Ah so ok. You would totally drop a seller who had multiple offers and chose a buyer who put some money down, or paid in cash. And forgo a substantial commission. Yes I see.

Again, VA loans are not the only ones that don't require a down payment. Pot meet kettle on the morally superior chest beating.
When this sellers' market shifts to a buyers' market, and one day it will, sellers will forget their moral directions and beg for FHA, VA, State HFA, Credit union, and USDA funded buyers to write offers.
Just like they did in 2009-2011.

LOL
Commission takes care of itself when one does honorable business. It is actually a reward for being decent.
Is jumping to confusion profitable for you?
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Old 06-09-2018, 12:21 PM
 
Location: Denver CO
19,094 posts, read 10,110,838 times
Reputation: 27975
Quote:
Originally Posted by MikeJaquish View Post
Sure.
But, why go to all that effort when it is easy to claim moral superiority on the basis of summarily judgmental discrimination?

VA Loans don't have a high failure rate leading to foreclosure. In 2013, VA loans had the lowest foreclosure rate of all types of loans in the market.
VA Loans close.
VA Loans make housing available and affordable.

And, these Americans have earned the benefit.


https://www.blogs.va.gov/VAntage/199...an-homebuyers/

I don't think it's about moral superiority, it's about risks. A VA loan may take longer and require more effort and more expenditure by the seller to get to closing. If I had offers that were more or less equivalent, how is it in my best interests to take the one that carries those risks versus conventional financing? Or better yet, a cash sale such as my most recent one, where my buyer waived appraisal, conducted a cursory inspection on his own and we closed in 2 weeks from the date we went under contract?

As I said upthread, the amount of money you net after closing is only on part of the equation and there is also a value to a fast, smoother, less risky process to get to closing.

And the reality is that the fact that VA loans don't get defaulted on is meaningless to me as a seller and not relevant to which buyer I want to work with. I have nothing against the program or that servicemembers earn this benefit but I'm still entitled to choose the best deal for myself as a seller, I'm not a charity whose mission is to make it easier for veterans to buy homes.
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Old 06-09-2018, 12:33 PM
 
1,781 posts, read 883,640 times
Reputation: 3813
Quote:
Originally Posted by SDWNC View Post
We had choices: 1) A guy willing to buy our house pre being on the market for 7k less and no agents. 2) An offer 5k above asking price with 20% down. 3) An offer 15k above asking with 5% down. We chose door #2. Consequently, nothing worth noting was found on the inspections (weren't asked for a dime). With #3, they would've seen stuff and we fixed the house enough over the years and weren't willing to take a chance on people who could only put down 5%. Too risky especially because we didn't have our house appraised (did the research and thought it was in the right range).

0% down is going to keep out buyers but 0% down may well hurt you. No money if items come up on inspection - you'll pay for them. No money of something happens to the house when they buy it. People shouldn't buy houses they can't afford. If lenders won't stop them, you can. Greedy mortgage lenders caused GWB's stupid crash and don't forget - one of the things in this regime's cabinet has the nickname of foreclosure king. They're waiting.
+10000

This is common sense.no matter what an agent tries to peddle to a seller.
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Old 06-09-2018, 12:34 PM
 
1,781 posts, read 883,640 times
Reputation: 3813
Quote:
Originally Posted by emm74 View Post
I don't think it's about moral superiority, it's about risks. A VA loan may take longer and require more effort and more expenditure by the seller to get to closing. If I had offers that were more or less equivalent, how is it in my best interests to take the one that carries those risks versus conventional financing? Or better yet, a cash sale such as my most recent one, where my buyer waived appraisal, conducted a cursory inspection on his own and we closed in 2 weeks from the date we went under contract?

As I said upthread, the amount of money you net after closing is only on part of the equation and there is also a value to a fast, smoother, less risky process to get to closing.

And the reality is that the fact that VA loans don't get defaulted on is meaningless to me as a seller and not relevant to which buyer I want to work with. I have nothing against the program or that servicemembers earn this benefit but I'm still entitled to choose the best deal for myself as a seller, I'm not a charity whose mission is to make it easier for veterans to buy homes.
Another cogent response rooted in a selling reality.
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Old 06-09-2018, 12:36 PM
 
1,781 posts, read 883,640 times
Reputation: 3813
Quote:
Originally Posted by MikeJaquish View Post
When this sellers' market shifts to a buyers' market, and one day it will, sellers will forget their moral directions and beg for FHA, VA, State HFA, Credit union, and USDA funded buyers to write offers.
Just like they did in 2009-2011.

LOL
Commission takes care of itself when one does honorable business. It is actually a reward for being decent.
Is jumping to confusion profitable for you?
You are brave enough to put all of your information out there. But man, some of these opinions are a real turn off to a seller who doesn't think in lock step with you. Hopefully you realize that.

Maybe instead of trying to guilt a seller into taking a zero down offer out of guilt or some sense of do-right smugness you could actually listen to their feedback and help them navigate a sale with a buyer they feel comfortable with.

Last edited by emotiioo; 06-09-2018 at 12:52 PM..
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