Agent to prospective buyer: “There are 5 other offers on that home“. Buyer to agent: “Ah man! I’m getting tired of losing out on all of these homes! What can we do?” Agent to buyer: “Add another $15,000 to your offering sales price“.
That was the approach some agents were taking earlier this year. Many are still. Finally, however, the banks have gotten wise to this ‘blue sky’ approach.
I made an offer for a prospective buyer on a nice Ridgemark home in Hollister. The listing agent informed me there were 4 other offers and 2 were considerably higher offers than ours. Reluctantly the buyers did not want to try again on this home.
What was fascinating however, was the bank countered that the offerees had to agree to pay for the amount over and above the appraised value when it came in. I like that! Finally, some intelligent approaches to this frenzy we’re seeing in the starter-priced homes. If the accepted offer was, say, $350,000, but the appraisal came in at $325,000 the buyer would have to pay $25,000 over and above the appraisal. Of course their loan amount is computed from the appraised value or sales price, whichever is lower. They would pay their down payment PLUS the amount over value.
Hopefully, more banks will begin handling the question of value up front in this manner rather than 3 weeks later when the other prospective buyers have moved on and the appraisal comes in low.
So, what do you think? Will this smooth out the ‘offering’ process some?