Home offer without contingencies when you need a mortgage

[Anonymous]

Has anyone put an offer on a home without contingencies (including financing contingency) if you were very confident in your financing?

We can fund a 30% or higher down payment, but in our target market, it looks like two thirds of the listings are going from coming soon to pending within 1-2 days, the other third are contingent purchases.

We have excellent credit scores, the ability to offer above asking (and expect to get in quickly and offer high), and a certification letter from a lender who will help us close quickly, but still worried about how difficult it's going to be to secure a home when we're competing with what appears to be all cash offers.

[Anonymous]

You are confident in your financing meaning, 1) you personally have the finances/liquidable assets to close, or 2) you are confident that a bank will lend you money?

As a buyer I would never waive based on my confidence of a bank lending me money, especially when unforeseen things can delay closing and put my borrowing status at risk.

As a seller, why would I accept your financed offer vs. a comparable all cash offer? I'm still taking the all cash (assuming this is your competition).

[Anonymous]

If you offer more than an all-cash offer then you have a very good chance of winning the bid, if your financials are strong. As a seller I would not leave money on table.

[Anonymous]

If you don't end up getting financing, you tell the seller. They can choose to keep your earnest money, but you don't have to sign anything releasing it. That keeps the house in limbo while mediation or arbitration plays out. They can sue, but that costs a lot of money and takes a long time. Realistically, they'll re-list and cut their losses

[Anonymous]

We waived home inspection and appraisal value when we bought. How can you waive a financing contingency if you don't have the funds to pay cash?

[Anonymous]

We waived all contingencies because we were confident of getting a mortgage. If you could put down 30% down and have W-2 income well within guidelines it doesn’t seem like a big risk.

Somewhere I read that like half of all “cash” offers end up getting a mortgage

[Anonymous]

If you're preapproved for a mortgage of this size this seems low risk. Am I missing something? Worst case scenario (very low likelihood), you lose your earnest money in the end, right?

[Anonymous]

The offers are not necessarily cash but people waiving the financing and appraisal contingencies. If you are confident of getting a mortgage at the highest amount you are willing to pay for a property, you should have no problem.

Just remember to include in your contract that an appraiser can have access to the house. We waived the appraisal and the seller would not let the appraiser in the house. Our agent contacted the listing agent and said that the contract had a provision that allowed an appraisal of the the house. The sellers were unaware of what they actually signed.

[Anonymous]

Yes we waived everything. There are a lot of threads on this.

[Anonymous]

Anonymous wrote:If you don't end up getting financing, you tell the seller. They can choose to keep your earnest money, but you don't have to sign anything releasing it. That keeps the house in limbo while mediation or arbitration plays out. They can sue, but that costs a lot of money and takes a long time. Realistically, they'll re-list and cut their losses

I'll keep your 50k earnest and let you pursue a hopeless case in court. Realistically speaking you'll lose. For me relisting means a hit to the sale price, the house has been tarnished in the eyes of prospective buyers, i'll relist after collecting the 50k.

[Anonymous]

Be careful in listing no financing contingencies unless you have like 10% extra in liquid assets.

I have seen cases where 1-3 weeks before closing, mortgage firms announce that they need additional paperwork and will delay closing to process. Or ones that say that something has changed and that they can no longer do 80/20 or 80/15/5. I have seen ones where there is a complication and they need to delay closing. All of these cases, if you decline the financing contingency, you are still responsible for closing even if your lender is responsible for the delay. The point of declining the financing contingency to gain an advantage is that you are guaranteeing to the seller that you will close on the assigned date. If the guarantee of financing is not in your ability to control, why would you waive that protection? Do you really have the money to put down in the event that the mortgage lender decides that they can no longer meet the original closing date? Closing dates slip often for many reasons, the majority of which are outside of the buyer's control; hence the need for financing contingencies.

If you don't have the money to put up for the sale, I personally think that waiving the financing contingency is a big crap shoot and not one I'm willing to bank on. But you can gamble with your finances if you want. As long as you are willing to lose your EMD.

[Anonymous]

Anonymous wrote:We waived all contingencies because we were confident of getting a mortgage. If you could put down 30% down and have W-2 income well within guidelines it doesn’t seem like a big risk.

Somewhere I read that like half of all “cash” offers end up getting a mortgage

Same here. We spoke with our lender at length about waiving the financing contingency, and he was like, "if your numbers are the same at closing as they are now, you'll get financing" - so we were careful and didn't make any big purchases between offer/closing. We also have very secure employment, so weren't concerned about losing income that would affect our ability to secure financing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you don't end up getting financing, you tell the seller. They can choose to keep your earnest money, but you don't have to sign anything releasing it. That keeps the house in limbo while mediation or arbitration plays out. They can sue, but that costs a lot of money and takes a long time. Realistically, they'll re-list and cut their losses

I'll keep your 50k earnest and let you pursue a hopeless case in court. Realistically speaking you'll lose. For me relisting means a hit to the sale price, the house has been tarnished in the eyes of prospective buyers, i'll relist after collecting the 50k.

And you will wait months for it all to play out and you may miss the best time to sell, not to mention possibly having to put your own plans to move on hold. But that is your right.

[Anonymous]

Do. Not. Waive. Inspection.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you don't end up getting financing, you tell the seller. They can choose to keep your earnest money, but you don't have to sign anything releasing it. That keeps the house in limbo while mediation or arbitration plays out. They can sue, but that costs a lot of money and takes a long time. Realistically, they'll re-list and cut their losses

I'll keep your 50k earnest and let you pursue a hopeless case in court. Realistically speaking you'll lose. For me relisting means a hit to the sale price, the house has been tarnished in the eyes of prospective buyers, i'll relist after collecting the 50k.

Cool story. Guess you've never gone through litigation.