Getting Your Offer Accepted
Have you been making offers on home with little result? Are your offers not getting accepted? This can be especially bewildering if you learn later that the home sold for LESS than what you were willing to pay.
The bouyant market of five years ago taught many home-buyers to come in at more than the offered price. This would pre-empt a bidding war and entice the seller into accepting the offer speedily.
Sometimes, though, the highest bidder does not get the prize.
The best way to have your offer accepted is to make a cash offer, even if it is contingent on getting financing. The main reason for this is the quicker close (as low as two weeks instead of an average of a month-and-a-half for a financed contract!) Cash purchases are much more of a sure thing for the seller, since the current market sees transactions fall out of escrow often when financing goes sour. In the case of a cash offer, there’s no uncertainty stemming from issues about the appraisal, there are no considerations of something going wrong during the home inspection, or worries such as the buyer’s credit nose-diving during escrow. Cash-offer buyers usually expect a hefty discount in exchange for the confidence and expedience they bring to the deal.
Conventional loans often trump FHA offers, since the seller or the agent may be weary as to whether the home’s condition will meet the FHA’s guidelines. Also, the FHA buyer tends to come in with a low downpayment, potentially raising issues as to his/her viability as a buyer – especially when compared to an offer with 20-percent down. Especially as pertains to REO homes (foreclosures), asset managers at the Bank will think twice before accepting an offer that comes in higher than their asking price. Since it’s not expected, it raises a red flag.
RealtyStore.com conducts a free foreclosure-buying webinar once a month. To participate, see the \Member Home Page for registration info). In our most recent webinar, RealtyStore.com member and foreclosure investor Chris Liddle recommended bidding as low as 12-percent BELOW the asking price.
Asset managers like it when a deal comes to fruition with the expected, and projected, terms. They’d rather take a sure deal that will close as specified than face the idea of asking for a price reduction in the middle of the process, which makes them look bad.
Chris Liddle also suggests pre-establishing relationships at the local bank and with mortgage brokers, having one’s finances well in order, knowing one’s FICO score, etc. in order to portray a strong financial image at the time of making an offer.