How to make an offer for a $850K-$950K competitive

[Anonymous]

For a hot (but not crazy) market, how to make an offer for a $850K-$950K competitive, or at least not grossly uncompetitive?

1) How much earnest money deposit
2) Does the seller know how much you are putting for downpayment? If so, how much over 20% down to put? And 15% down would be seen as uncompetitive?
3) I think appraisal contingency should be included, as would financing contingency. Should one include an inspection contingency, or do a pre-inspection?
4) Current home sale contingency: is it silly? Better sell current home and then buy future home?
5) Not really applicable at that price point, but I guess FHA or VA is silly, right?

Thanks

[Anonymous]

Just purchased a $930k house with multiple offers in a hot neighborhood. This is just based on our experience (keep in mind that we really, really, really wanted this house):

1. $50k
2. Yes - the seller knows because it's in your offer paperwork. We had 25% to put down, and our realtor thinks that was mildly helpful, but only if we're competing against someone who is offering an identical price.
3. We did a pre-inspection and that made our offer much more competitive. Of course, you risk losing the inspection fee if you don't get the house. We waived the appraisal contingency because we had a lot of money to put down (and it ended up appraising for more than what we paid).
4. This is our first home, so I don't know about this.
5. Yes, FHA is really silly at this price.

[Anonymous]

Multiple bids, va loan at 890k, no sales contingency and intent to pay cash over appraisal won it for us.

[Anonymous]

Anonymous wrote:Multiple bids, va loan at 890k, no sales contingency and intent to pay cash over appraisal won it for us.

What sellers want is the maximum amount of money with the least roadblocks (contingencies)

[Anonymous]

Wow. This sounds like pre-bust all over again. Do not pay more than the appraisal. Basic economics.

[Anonymous]

Anonymous wrote:

Wow. This sounds like pre-bust all over again. Do not pay more than the appraisal. Basic economics.

And you won't get the house

[Anonymous]

Write a letter to the sellers- if you think they would like you. Have a professional highly regarded agent that the listing agent wants to work with.

[Anonymous]

The current financing contingencies using the regional contract are implied to include appraisal contingencies. A separate one isn't necessary.

Sale of home contingency is way too risky for the seller to ever be competitive in a multiple offer situation.

VA and FHA are seen as "weaker" and more complicated to get funded, only use if absolutely necessary. Also, you can change your financing after your offer is accepted as long as you don't need additional time for contingencies... Just a thought in case conventional is possible but FHA is more comfortable

[Anonymous]

Anonymous wrote:

Wow. This sounds like pre-bust all over again. Do not pay more than the appraisal. Basic economics.

Most appraisals are done curbside while looking at a listing sheet. No one is looking at the Wolff range and subzero fridge. It's not exactly spot on most of the time.

[Anonymous]

I dont know if 22:19 and 22:27 are the same poster but they are both very bad advice. Financing and appraisal contingencies are different and I haven't seen a drive by appraisal in years, even for refi's.

[Montana]

Never write a letter to seller. It is a large financial transaction, nothing more. Money talks. Writing a letter is what u do if you like house but can't pay any more.

[Anonymous]

Anonymous wrote:Write a letter to the sellers- if you think they would like you. Have a professional highly regarded agent that the listing agent wants to work with.

The letter writing usually doesn't work. 99 times out of 100, sellers go for the highest price with the least contingencies.

[Anonymous]

Anonymous wrote:Multiple bids, va loan at 890k, no sales contingency and intent to pay cash over appraisal won it for us.

We also won a 1.9 Mil home using VA funding, no sales contingency and paid 30% down. We used VA as we were able to get a fixed rate of 3.25% on a loan over 1 million dollars.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Wow. This sounds like pre-bust all over again. Do not pay more than the appraisal. Basic economics.

And you won't get the house

People said that in 2006

[Anonymous]

The sellor is usually interested in the least amount of roadblocks and the most certain outcome at the highest price. When looking at equal offers, the RA will advise to go with the one with the best credit rating/financing. If you appear to be "reaching" the seller might pass you by. The seller really wants the deal to close -- the last thing they want is to take the home off the market and then have the financing fall through. They have lost time, qualified buyers, and the "reputation" of their home is impugned (what if the financing "fell through" b/c there is a problem with the house? is a question the next buyer will ask?)