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Have an offer on a home. Why would the seller be hesitant on accepting an offer that shows that we would get financed 100% on our mortgage? They prefer if we gave a down payment instead of 100% financing.
Also, is it common practice for the seller's agent contact my lender?
Our offer stated the seller had 3 days to decide. The only thing we have heard back is that they are willing to entertain the offer but are waiting for the city to do an inspection in order to permit an added room.
Should we withdraw our offer? Offer is null because its past 3 days.. correct?(first time home buyers, so have many questions)
Not knowing your specific case... this is just general.
Listing agents have contacted me before to ask about my buyer's status. The lender should NOT disclose any financial details or personal information. Usually the listing agent wants to verify I am legit and ask me if the buyer is qualified under the conditions I stated in my pre-approval letter. This is in case they have doubts and want to make sure that we did our job (some lenders do not and deals fall through).
They may be worried beacause 100% financing programs are being restricted or eliminated by many lenders. I had a few buyer's whose offers were rejected last month get calls this week because the offer the seller accepted fell through once the lender cancelled the 100% program they were using. This could tie to your other question about why the call the lender to make sure that the pre-approval is not old and that you now require 3-5% down to buy.
As for withdrawing the offer, I will let the Realtors field that.
The listing agent is just showing due dilligence by protecting the seller from potential problems that arise during the loan process. rcarrillo said it very well. As long as the lender sounds legit, 100% financing is just not happening much... very rare.
On the 3 days eadline... how was it worded... if they don't respond in 3 days what happens???? did you put down that the offer is null and void?? If it was left open, then the offer is still on the table and they can take as long as they want to respond.
Not sure where you are, I would talk to your real estate agent, but your contract should have a period of time (of the essence hopefully) which the seller has to respond. If they have not accepted the other, you can likely withdraw the offer. Just make sure you get it in writing.
Well, if you don't have an earnest money check, that really puts the transaction in doubt, whether you have the financing or not. Remember that they want to sell, and anything can go wrong between an approved contract and the closing.
Exactly, because closings can blow up even on the last day and financing can fall through due to the lender withdrawing funding despite a previous pre-approval. Much more likely with 100% financing.
When we sold our house last year our buyer's lender went bankrupt two days before closing. She only had 5% down payment and a credit score of 610. She and her broker had to scramble to get a new loan and closing was pushed back several times. This causes a whole chain reaction i.e. changing your move, changing your own financial commitments, maintenance, school and work...and is extremely stressful. With more down payment and higher credit score she probably could have gone to a bigger bank or lender and avoided all of that (not even talking about her getting a better deal on the loan). All of this was last year before the big crash. There is even more uncertainty in the market now. So you have to understand why the sellers like to see more downpayment. It just makes it more likely to come to a successful closing. I on the other hand totally understand that you would like to buy your first house and with the high prices of real estate it is very hard to come up with any down payment. I wish you Good Luck, and who knows what it is good for if you don't buy this house.
Have an offer on a home. Why would the seller be hesitant on accepting an offer that shows that we would get financed 100% on our mortgage? They prefer if we gave a down payment instead of 100% financing.
Also, is it common practice for the seller's agent contact my lender?
Our offer stated the seller had 3 days to decide. The only thing we have heard back is that they are willing to entertain the offer but are waiting for the city to do an inspection in order to permit an added room.
Should we withdraw our offer? Offer is null because its past 3 days.. correct?(first time home buyers, so have many questions)
I would balk at 100% financing as well. As of March 31, no MI company will insure mortgages up to 97% LTV ratio. So...not sure when you got your financing approved, but I would be all over your lender as a real estate agent asking questions about your ability to finance 100%.
If you are past the 3 days, your offer is no longer valid so you don't have to withdraw it. Since you are first time home buyers, PLEASE go get some representation from a good agent. You WILL need it to navigate through the current market.
With 100% financing, they have nothing to lose if they back out of the deal. If the financing does not come through at the closing table, they have lost nothing, and the seller has had the property off the market, when they could have sold it.
Right - but from the sellers point of view, if someone wants to back out of the deal, they have lost nothing. The seller has lost time and opportunity.
Ultimately, you want to sell the house, get to the closing table, VA loan is a pretty good bet. But if the seller has been burned or has concerns, they will prefer the offer that puts something up front.
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