Hey home buyers,
I wanted to provide some feedback in hopes that it might help anyone who’s having trouble winning a bid on a home purchase. In the months leading up to listing our house, I read dozens of comments on here that, “No one will accept an FHA offer in this market!”
Malarkey. I’ll share our situation and what we looked for in the winning bid.
We have a 25 yr old (but completely updated) townhouse in a very hot sellers market. Not nearly enough homes for sale and too many buyers looking. Good school district, elem school and public library within walking distance, nice community, lots of parks, soccer fields, playgrounds, community pools, kids riding bikes, people walking dogs, very active community near restaurants and stores, etc. It’s a very sought after area. We listed our house Friday night, had 21 showings over the weekend, got 9 offers in 48 hours, and went under contract today.
My husband and I either need to buy our next home contingent on selling this one, or wait until the settlement is over to make an offer. (Student loans...) We both WFH and we have a baby, so moving twice would be extremely disruptive to our lives and to our son’s sense of security and routine (AKA sleep regressions, bad behaviors, lots of bickering, etc.). Finding a buyer who would allow a 60 day rent back was not only desirable, it was a non-negotiable.
We didn’t go with the highest offer. We went with the most flexible.
7 of our 9 offers would allow us to rent back for 30-60 days. We appreciated their flexibility and automatically nixed the 2 who wouldn’t let us rent back.
Of the remaining 7, only 2 were conventional. Both offers were above asking (not the highest), but wanted $5,000 in seller concessions and wanted us to be contingent on us making repairs as noted in the home inspection. Asking sellers to make repairs and pay your closing costs in this market? Dream on.
That left us with 5 offers. The highest was for $13,000 above asking. They didn’t offer to cover an appraisal gap. They wanted to back out if it didn’t appraise or have us reduce the price. Goodbye.
Of the remaining 4, the one that stood out to us the most was the one who was the most flexible. He was the ONLY one with an escalation clause ($3,000 over highest bid up to $X). He was also willing to pay up to $5,000 appraisal gap and put down $6,000 EM (shows he’s serious) AND is letting us rent back 59 days from settlement at a very low price. (He’s in a lease until the end of July anyway.) He’s doing a P/F home inspection, so as long as they don’t find anything major, he’s sticking with it. He is FHA but already has a commitment letter from his lender.
I realize a lot can happen in the next month til closing, but it can happen to any property, whether your buyer is conventional or FHA. Anyone can lose their job, pass away, etc.
I guess my message is: the most appealing offer to us was the most flexible one, not the highest one. People who were asking US to do things for them were a joke (this isn’t 2012...). People who made huge offers but weren’t willing to do an appraisal gap- why?? People who wouldn’t let us rent back made some high offers, but not enough for the expense of us moving twice, signing a lease, and the general PITA it would cause. Maybe consider looking lower than your max budget so you have more room to play with. Best of luck!
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source https://www.reddit.com/r/RealEstate/comments/mg3nix/9_offers_over_asking_in_48_hrs_seller_heres_what/
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