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Hi All,
As home buyers navigating this super hot sellers market, we previously have had two offers (on different properties) fall through.
Today we were looking to offer full asking price on another property and just heard that there are 4 other 'strong offers' in consideration. Rather than go over asking and get into a bidding war, we are thinking of putting in an all cash offer. I understand that with a cash offer a lot of the work in terms of title search/insurance, appraisal, closing etc will be our responsibility.
Not being experienced in this process, is this something an real estate attorney would be able to assist with and watch for our interests? Also will that person need to be in the loop prior to signing the purchase contract?
We do have a buyers agent and will be discussing this with her. But wanted to reach out to the experts on this board for their views. Are there any attorneys in the Cary/Raleigh area that specialize in such cash transactions? The offer price is not super high and is in the high 200s.
Appreciate any pointers or recommendations.
thanks!
Hi All,
As home buyers navigating this super hot sellers market, we previously have had two offers (on different properties) fall through.
Today we were looking to offer full asking price on another property and just heard that there are 4 other 'strong offers' in consideration. Rather than go over asking and get into a bidding war, we are thinking of putting in an all cash offer. I understand that with a cash offer a lot of the work in terms of title search/insurance, appraisal, closing etc will be our responsibility.
Not being experienced in this process, is this something an real estate attorney would be able to assist with and watch for our interests? Also will that person need to be in the loop prior to signing the purchase contract?
We do have a buyers agent and will be discussing this with her. But wanted to reach out to the experts on this board for their views. Are there any attorneys in the Cary/Raleigh area that specialize in such cash transactions? The offer price is not super high and is in the high 200s.
Appreciate any pointers or recommendations.
thanks!
There is not a huge material difference in the attorney's title and title insurance work whether you pay cash or borrow. Closing attorneys really love cash deals, since there are no lender delays and confusion. They will be delighted to offer you a full range of service, and usually at a slightly lower fee because they will not have to handle or record a deed of trust.
If your agent is a Realtor, you will be using the NC Association of Realtors standard Offer to Purchase and Contract form. Never let an agent tell you, "You don't need an attorney to review the form." We are just not allowed to dissuade you, ever, from accessing legal counsel. And since it is a cookie cutter form, which Realtors are trained to complete properly, an attorney may say that. If your agent is well-experienced, and the attorney has worked with him/her often, the attorney may well tell you that you are OK without a review.
OTOH, I have already this year received half a dozen offers that were delivered by obviously incompetent agents, so it may be worth a couple hundred dollars to have an attorney review it prior to offering, at least to make sure it is filled out completely. And, no attorney will be able or willing to make a blanket statement like, "This Offer is perfect." That brings way too much liability to their doorstep. You will need to ask specific questions you have, and have the attorney answer.
Bear in mind, you say it is a "super hot market." Yes, it is. Make sure your attorney will turn the offer very very quickly, since many houses are selling in hours. No seller with multiple offers is going to wait around for your attorney, so attorney review of your offer can easily cost you a house in this market.
Your offer should reflect market value, with little regard to list price. You either offer market value, or under market value, or over market value. A good agent's market analysis should pinpoint a good market value range.
Your agent should be able to tell you that there is no such thing as a "bidding war." The term "Bidding War" highlights your admitted inexperience. I work in a "No Crying" mode. If a client offers less than what a house is worth, they shouldn't cry to me when someone else gets it.
And, it is a common strategy right now to price low, to get attention and garner multiple offers. If a house is priced at $195,000, will appraise for $215,000, would you be comfortable that you received good value if you pay $200,000? You probably should be.
This week, I showed a wet house in a flood plain, with a poorly drained wet lot, mold in the basement, water stains 6" high on the basement walls, with lipstick on the finished areas. Pretty undesirable, IMO, at any price. It sold the same day. I am curious about the price, because the flood plain is an incurable deficiency. So I will watch it unfold.
Is appraised value a contingency of the offer? If not, what is the need for an appraisal in a cash deal?
IF the buyer is using the NCAR Standard Form, the Due Diligence Period language suggests an appraisal.
And, the buyer can "terminate for any reason or no reason," so appraisal is a choice in a cash deal.
Appraisal in a cash deal is useful for a buyer who does not trust their agent's market analysis, and/or to have a professional confirmation of value provided by one who has no stake in the outcome.
Thanks Mike. Is an appraisal typically completed within the timeframe of the diligence period? Seems like it would take longer than that.
If the appraisal is not completed within the time frame, the parties may negotiate an extension for the appraisal.
But, if a buyer is aggressive and thoroughly vetted by the lender, and submits loan application immediately, a good lender pushes out the appraisal order right away.
So, with a typical 21-30 day DD Period, appraisals are usually delivered prior to expiration of DD Period.
Things get iffy if the buyer is disorganized, unresponsive, doesn't have an agent pushing them, lackadaisical lender/processor, etc.
If the appraisal is not completed within the time frame, the parties may negotiate an extension for the appraisal.
But, if a buyer is aggressive and thoroughly vetted by the lender, and submits loan application immediately, a good lender pushes out the appraisal order right away.
So, with a typical 21-30 day DD Period, appraisals are usually delivered prior to expiration of DD Period.
Things get iffy if the buyer is disorganized, unresponsive, doesn't have an agent pushing them, lackadaisical lender/processor, etc.
Except there would be no lender here. Just a buyer trying to get their own appraisal.
Except there would be no lender here. Just a buyer trying to get their own appraisal.
In this case, yes, there is no lender.
If the cash buyer wants an appraisal, appraisers would line up and drool for the job and would be glad to turn it around quickly.
They would enjoy:
No idiotic underwriter entanglements.
No pay reduction by the banks or AMCs. Appraisal Management Company Q&A | realtor.org
Just work for hire.
Appraisers are being treated pretty shabbily by the lending system currently.
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