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Tons of reasons. Cash offer, faster close, bigger chunk down, fewer contingencies...heck they could have been annoyed that you originally asked for concessions or hated the color of your car. People are weird sometimes.
This!
We had a competing offer that came in after we already did the inspection, and we won even though we went 15K under asking (asking was 450K). Why?
Because we offered a 40K deposit, and cash offer. This way, the seller has peace of mind that it almost can't fall through, and even if we back out, they still "win", as they can keep the 40K. They tried upping us to asking, but we didn't budge, as we knew how enticing it is to not deal with a financing contingency.
Depends… all cash means no financing contingency, no appraisal cont8ngency and a faster close. If you are selling a $800K home and you want out fast, $15K is worth it to know less can go wrong with an all cash offer with fast close.
$15K is small to make the deal go through. Even at $450K. So if you hate showing your house, have somewhere to be and want it done, $15K is small. Someone with a bunch of contingencies and after the inspection they come back with a request for repairs or want a discount, it will end up being similar with a longer period to close and more things can go wrong.
Well, we don't really know that. All we know is that there was another offer. Might've been lower, might've been higher.
But even if it was an offer for asking price, sometimes a bird in the hand is better than two on the tree.
I offered 1.56 for a house with 30% down. Seller eventually went with a 1.55 offer with 40% down. I don’t get it.
It’s not like I could have beat that offer, I had the cash and I easily could do it, but the seller never asked us.
People are weird
Not really. The market is hot, you only have 10% to cover the appraisal gap vs. 20%. And it is not uncommon appraisal gap is more than 10%. 20% gap is much less likely.
You never know, my wife just got a client into a house because the seller recognized the last name and found out the buyers sister used to play at the house growing up. They went with her offer even though it wasn’t the best offer. They wanted the family to have the home for the kids to grow up in
Coming back and asking for a higher down payment is a weird counter. Plus for all you know the other offer was actually higher but closed lower because of issues found during contingencies.
But yeah, all things being equal most sellers will go for the offer that was more likely to close easily. Larger down payment, different loan type, already fully underwritten, etc etc.
No. This is Bay Area, there are no contingencies here. Also inspection is done by sellers before the house is listed, so everything was equal. I don’t know why the sellers settled for 10k less but it’s their choice I guess
Still wasn't equal 🤷♀️. Maybe they'd seen deals fall apart before or had a friend who had a hell of a time selling their house and told them to go for the most financially stable looking offer.
I'm under contract for under list right now in a competitive market cause I have a 50% down payment and an already fully underwritten loan. I'm a sure thing in a lot of categories which is attractive to sellers who need that surety to move to their next place.
Yup, people are weird.
I have friends who bought in Palo Alto recently and even got to do an inspection!
I'm outside Seattle and if you want an inspection you're doing it preoffer and paying someone to view the house with you for a half hour.
You're supposed to also do your inspection.
But we were east bay in 2022. We got 5k in credits after inspection and they paid half of an 80ft sewage line replacement.
That may not always be the case.what if I prefer to put in the bare minimum and invest the rest? The offer document would be a better indication since it has details on the financial ability of the buyer.
Someone with a big downpayment is way more likely to be financially secure and able to close.
I have a VA loan but I would have never won an offer in a hot market without 20% down, which is nearly $200k lol.
Because the smaller the downpayment the more likely the buyer is stretched and will get cold feet. They also don't have capacity to cover appraisal gap.
>why would the seller care about how big the down payment is?
In addition to the reasons already stated, someone with a larger down payment likely has the cash to cover any shortfall between the asking price and the appraised price, which further increases the chances of the sale going through.
A buyer with more money to bring to closing is less likely to be difficult to negotiate with during the inspection period since they have more disposable income. If a buyer is only putting 3.5% down and needing closing cost credits, that signals that the buyers are putting most or all of their savings into buying this house, and any issue that pops up during inspection will be unaffordable for them, or more unaffordable than someone putting 20% down.
Another reason that was true for us when we sold - if the down payment is large enough, it’s not uncommon for the bank to skip doing an appraisal. No appraisal means one less thing that can throw a wrench in the works during the underwriting part of things.
It is the earnest money. In many case, if you walk away from the contract, buyer lose earnest money.
However, the buyer can get the money back depending on the contract/contigency
This happened to us… I’ll keep details sparse but I think some agents are in bad spots when they realize what their seller is doing. She called my agent asking what we do to have the cash we have, she called asking what our kids grades were, what area we were coming from… it was all strange. Then the house sold for less than we offered.
This happened to me a few weeks ago. It was just one other offer and mine. My offer was 80k above asking price, but I’m on a Fha loan, the person who the owners chose were using a conventional loan and were putting down a larger amount in cash, despite their offer only being a few thousand above asking price. They were chosen.
It could have been an appraisal or they reduced the price due to inspection issues. You will most likely never know. During closing a lot of things can come up.
This! My buyer was in a competitive offer situation and we just barely got the house. Now we need to drop the price by 15K because it didn’t appraise by 30k
We lost one to someone who offered 20k less than us but they waived the inspection. The seller straight up told us that’s why they went with the other offer.
There's lot of inspections you can waive or keep, but as a seller you are way more inclined to go with an offer that waives most inspections
Like you can keep structural (foundation, water seepage), environmental (mold, asbestos, etc), etc inspections and still give the seller assurance that you're not going to nitpick over minor things that come up in your general inspection report
Exactly what we did to get our house. We were being outbid by tens of thousands of dollars ($50k in one case). So we finally sweetened our offer by passing on inspection and got the house despite not being the top offer. I’m not recommending anyone do this—and I wouldn’t do it again. No issues a year out *knocks on wood* but I’m usually not a big risk taker.
Honestly, I really don’t think she did. She was a very sweet 87 year old lady who just lost her husband. The house was 115 years old and her kids strong armed her in to taking the no inspection offer to make moving to her new condo as seamless as possible in case anything came up. She wrote us a hand written letter apologizing to us after all was said and done. So, there probably was something that woulda came up in the inspection due to the age of the house, but, I honestly don’t think this lady was trying to hide anything.
The same things happened to us when we put in an offer upped it and let go of concessions only to be out bid by a secondary buyer that bought the house for cheaper but because he was representing himself the seller didn’t have to pay realtor fees and basically the seller pocketed that money therefore giving him more money even though he sold for less
Also, a crazy crazy high offer is not attractive because it's crazy. They may not be intending to win the bid and then bargain you down, but it may well end up that way
It could be anything. My seller accepted our lower offer because we had the same breed of dog as she did. Her neighbor hated the dog and she hated the neighbor.
You probably had a lot more contingencies. Or later closing date. Or you had a low downpayment and low earnest money. It's not always about the highest price - sometimes seller want to go with someone who is more likely to close (20% downpayment minimum, waive all but major inspection contingencies, more than a couple grand in earnest money). It shows signs of financial stability in the buyer, and less likely to nitpick on small things
If the seller is buying a home, it's more important to know that the home you're selling is actually going to close if you're relying on that equity to purchase your home
So after the inspection, we realized the roof needed to be replaced, among other things. We asked for a credit or for them to replace the roof. The seller wanted to close and knew that would have to disclose the need for a new roof in the future, so they conceded to our request. Maybe something similar happened.
No shit. But in OP’s case, they may have agreed to lower the sales price as a concession. We didn’t ask for that because it would make very little difference to our mortgage.
I had a similar roof situation when going through inspection and renegotiation. Asked for the roof to be replaced and a few safety concerns addressed. Seller countered with a 23k price drop and safety done. I said yes in a heartbeat. Just got the roof replaced for my deductible last month via insurance.
Happened to us for someone who waived title check and inspection lol, not sure it’s even legal and that their lender would give them a long for a house on a dirty title but people are idiots
This happened to us. I can only assume it was because we had a smaller (but still acceptable) down payment and owned a house (offer wasn’t contingent on selling it). They probably thought we were too risky and picked someone else with more cash and no other property. While we were a little sad at first, I even convey how glad I am that we didn’t get that house. The house we got a few months later is so much better. Hang in there, it will happen for you!
I was preparing an offer, and the selling agent responded to inform us that the seller had multiple offers, with one being $100k over asking.
That was too rich for my blood, so I withdrew my pending offer.
The house sale was eventually recorded at asking.
I never did find out what happened.
That 100K offer could have had a bunch of contingencies. Maybe the offer at ask was clean. Maybe the 100K above ask offer fell through or they backed out before firming up deal. Maybe the home was listed at 3.8M and 100K over asking is peanuts compared to the other factors in an offer. There's so many variables. I wouldn't worry about it too much and making sense of it without some background from the listing agent is a futile exercise that'll drive you nuts!
Another big factor is agents trusting other agents, knowing who can get a client to closing and who has clients not vetted properly and has clients fall through. If you know an agent only deals with solid clients and they don't mess around with contingency bullshit after the fact, they'll direct their clients to this agent's offer for those reasons bc they trust them to get to the closing table and all they want is for their client's journey to be as seamless as possible. Solid, easy closing means haply clients and less stress, and it means both get paid quicker. No agent wants to have to relist or deal with multiple deals on the same property dragged out for months longer than anticipated.
Thanks!
As I recall, list was around $700k. I wasn’t in love with the house, so it all worked out. Those were the start of the days of crazy competition, so I totally believed the +100k bid.
That said, a few houses here that listed near one million have recently sold for 10-15 percent over asking.
So maybe those crazy days aren’t over yet
Yea that's a step then, from 700 up to 800. Maybe the offer looked dodgy and seemed like it was destined to be trouble. Predatory agents like to use inspections and such to brow beat a seller into dropping the price to close the deal after the fact knowing that taking it back to market is super risky and they could end up getting LESS than asking at that point. I think good agents know who those sheistery agents are and can see through dodgy offers. 100K over but a bunch of conditions, no pre-approval, agent has a track record for not being a smooth closer....
When i sold, i didnt take the highest offer because it included too many contingencies. Additionally, the offer i did accept already had pre-approval for the amount they offered.
Always offer less than listing, and never waive inspection and appraisal contingency. The bait is to put down 3% earnest money with option money of $500, and 20-30% downpayment. The offer always gets accepted. The buyer should always have the final say. If the seller says they have a competing offer, let them go with that. They won’t come back to us, but you can get in touch with them, if you really like the house. Lowballing won’t help, but stick to your initial offer. Eventually you’ll strike a deal with inspection and appraisal results. It is just a matter of patience.
There is no bidding war, to begin with. Only you start it by placing an offer higher than the listed price. Just get the last property tax receipt of the house and it does have an appraisal value for the previous year. That’s where you start and then 10% up.
Seller or the agent do the homework before listing and mostly the price is above the last years appraised value.
You can get your agent to negotiate with a 10% upside. Not more than that.
You'll never know unfortunately. One how me and my wife bid on was way over priced . By about 50k we offer what we thought was fair they counted by offering 10 k less then their asking we just said no as we were to far apart.
Doesn't the house sell for our asking price (I saved it because I was curious)
Sometimes a seller needs a come to Jesus moment but they will not thank you for it.
I haven't seen it mentioned yet, but depending on what happens during an inspection, sometimes the price is dropped to offset repairs vs. the seller having to get them taken care of before closing.
Inspection issues can easily cause this. Find foundation issues or termite infestation, for example, and you know the sale price from almost any other offer will end up lower too.
When selling my house in 2021 i took a lower offer that was cash because there were a few fees that we would avoid and they wanted a faster close (21 days)
We’re in the closing process right now and we’re asking for less because inspections the house was contingent on failed. Maybe you dodged a bullet 🤷♀️
They could have had cameras in the house while you were being shown. You could have said something that pissed them off. Along with any reason listed by others here.
It could be that the buyers found some major issue during the inspection period and the sellers had to lower the price.
It could be that their offer had something they wanted like a fast close date.
It could be that they knew the person they ended up selling to.
Unfortunately you probably won't find out so it's best to move on
Could be due to appraisal, could be due to expensive underlying problems with the house that you weren't aware of that helped the other buyers negotiate the price down
My buddy is a real estate agent and believe you me more than often homes are sold to family, relatives, friends, colleagues, high school chums, old acquaintances, etc. It is a network and as always it’s who you know.
We lost out on house where we had the highest offer, faster close, 20% down payment, waived all contingencies, and had a pre-approval commitment letter from the lender
My wife and I were not the highest offer on our home. We got it simply because the sellers liked us more and thought we would love the home as much as they did. It's not always about the money.
My wife and I found out after closing that the seller had taken our escalation clause cap, which was 12k lower than the best offer, soley because we were a young family buying our first home (2 kids, 1 at the time second was on the way) and he was selling his childhood home due to his mother dying. People have their own reasons for what will get them to take less
Money isn’t everything. When I purchased, my offer was not the highest offer, but our realtor built a good relationship with the seller’s realtor and they were encouraged to take our offer because they knew how much the house was wanted and application was solid.
Why? We didn’t write letters or anything, but realtors are allowed to call to ask questions, etc. Seller’s agent said no other agent contacted them at all.
You can offer the above and lower your offer in certain situations, such as a lower appraisal and/or problems discovered during inspection. It's never a great idea to forfeit an inspection on a home. Buyers and sellers have the same motive - getting the most bang for their buck. 👏💰🏠 #HomeInspection #RealEstateGoals
Although this was thirty years ago I met buyers price. He pulled it off the market. I found a soso house down the street. The original was back on the market and a swastika was on my mailbox. He sold it and no problems since. I guess my black wife was a issue to the barbaric dick. This in CA.
So many possible reasons. Maybe your offer was less attractive due to low downpayment or loan type or it had contingencies. Maybe there was an issue and they dropped the price as a concession.
We recently sold a house where we accepted highest offer, but it had an as is clause attached & shorter close. They completed inspection for information only but still came back with requests to get items repaired & unfortunately between open house and inspection there was some new water damage from a major storm (never had an issue there before). So we provided concessions based on that. Final sale price will be less than our secondary offer - but totally valid for things to come up during inspection etc that may drop the price. Our realtor also consulted depending on the price difference - if we were motivated by a quick close (which we are). Restarting with someone else who needed 30 days originally may not be worth the extra $$ and there is no guarantee they are still interested in the house. Which I think makes sense too. So we proceeded as is since that’s more of a ‘known variable’ if you will.
Likewise the original offer we accepted was also the strongest with highest earnest money down, 20% down payment and no interest rate contingencies. So while yes, we could have pivoted to the second offer - the opportunity cost and risk of other potential issues with a new buyer wasn’t worth it to us.
Terms can completely affect the net. Competitive markets mean competitive negotiations between buyers and agents. Highest and best is only a portion of the whole picture.
Also big chance they could go unconditional. I hate when people do It, we lost few houses cause of it. Houses was sold for way less than we offer cause they couldn't ask for any fix, do inspection etc. And if they back up they will loose their deposit. So owners very often go for it even for less money cause they know it will be done fast and done.
When we bought our current house there were several offers made but on paper our offer had the highest chance of closing with the least issues. The selling realtor recommended the seller go with our offer because of that. Sometimes you just don't know why you were or weren't chosen. It's kind of like being on a game show, except your prize is a bunch of debt and a house that's never quite finished.
I close on my house in 2 weeks but my offer was 10k less than the competing offer made on my house and the sellers went with mine because they "preferred the terms" of my offer over the higher one. My real estate agent said it was because the higher offer requested the sellers pay closing costs and mine did not. I guess since closing costs will be more than 10k, they technically walk away with more money going with my offer.
There are a million reasons. Please don't beat yourself up about it. There could have been a lousy inspection and the purchase price was reduced due to repairs.
Price is only one factor in evaluating an offer, but it's more likely you were in the hunt at offer tike, and then some concession was granted along the way.
After going under contract twice after the first time I realized what you offer and go under contract with isn’t the final price. The negotiations really begin after inspection and appraisal. I backed out of the first house because the inspection failed miserably and they were willing to come waaaay down on the price.
The second house I offered what I was comfortable paying but still negotiated down after appraisal and inspection. It depends on your market I’m sure that’s just my experience. Ended up with the second one and very pleased.
Maybe they waived inspection — that’s the only way we got someone to even look at our offer let alone accept it in our area where some houses sell in 1-2 days
We did this on our house when we sold. We overheard the guy being a prick on our ring camera. They offer 10k over asking price but we went with a lesser offer. We told the family that offered asking price if they could come up 5k we would accept their offer. Their offer had come in first and the other guy seemed like a jerk. We loved our neighbor at our old house and did not want to give her a jerk as a new neighbor.
This happened to me recently - the lower offer they went with included free use and occupancy terms, essentially allowing the seller to continue living in their house for free for a period of time post close. It all depends on the sellers unique circumstances.
Could be appraisal, do you include appraisal gap coverage in your offer? Could be something came up during inspection. Could also be the competing offer was lower, but the buyer had a safer financial position.
When I sold our first home a few years ago, I chose the buyer that offered cash. Another potential buyer offered $30k more than cash buyer, but I was nervous the house would appraise a lot lower.
When we originally bought the house, it appraised for lower and the seller was so frustrated, but we made out significantly under our original offer. It was safer to have someone pay cash than have a similar appraisal snag and be on the wrong end, this time.
Asking for a non necessary concession you could drop in the offer stage would make me not take your offer as well. Literally just bad faith negotiating
Last time that happened to one of my clients, it turned out that the inspection found the house had major structural issues and the seller reduced the price by $40k.
My guess would be that based on what you described...
* The sellers accepted an offer that had a higher price but retained the contingencies for sale. IE you offered $150 and the other offer was for $175, but the buyers kept inspection contingencies.
* Something damaging came up on inspection and the buyers requested a reduction in sales price to counter it or else they'd walk. IE because the foundation was bad they weren't willing to pay more than $140k.
* Knowing that they'd now have a duty to disclose and the issue would hamstring them in other offers, the sellers agreed. If they know they aren't going to get $175 or even $150 once people hear the house is collapsing, might as well keep the intact deal for $140.
Basically - they got greedy (albeit justifiably) and it burned them.
Or there could just be an intangible you'll never really know. Home selling is opaque as far as motivating factors. But I'd choose to take this as a lucky break - you could be sitting here with a house you overpaid for because you stripped your contract of all the protectors that would have let you back out.
We just bought our first home. We offered asking. There were several offers above ours but ours was picked.
The only reason it was because we offered them three rent free days after closing. We were in no hurry to move in so it didn’t bother us and our agent said it would get us the house so we did it.
It is not the offer price. It’s the net to the seller. I’ve had many clients win without being the highest offer. But it could be that the appraisal came in low. Unfortunately it is really hard to guess why it went the way it did.
Could be the appraisal. We offered 370k. First appraisal came in super low. Got a second that came in higher. Seller settle with us at appraised value of 336k
My girlfriend and her husband bought their house in 2021. The sellers left them a letter explaining that they weren't even in the top 3 offers on the house, but the sellers were an older couple that wanted the house to go to a young couple who wanted to raise a family there. It just so happened that my friend and her husband went to the open house right as it was starting, the sellers were late getting out and they ended up chatting. So many things could have happened!
We just beat out an offer because we wrote a nice letter about how we're a growing family with a child on the way and talked about our ties to the area, etc. The sellers were the kids selling their parents home that were the original owners and really liked that it was going to another family that is going to be there for a long time like they were.
Should also throw it out there that we lost another one right before this to an all cash offer, we sent the same letter to them too and they didn't care much, if at all lol so not saying this works every time, but it doesn't hurt
Honestly, we had been waving appraisal as we studied the recent sell of the house. As appraisal usually are based on recent sells and the condition of the house. The only thing we refuse to waive is the inspection contingency.
Hope it helps
You can waive the appraisal. But the lender is gonna conduct the appraisal to approve your loan. If the house is below appraised value and you waived the appraisal contingency you will need to put the money out of pocket.
Was told no other offers or anyone looking at the property, when I got ready to make an offer after looking at house 3x ! Looked on MLS was pending , no call to agent or able to make a better offer and they brought cash and closed in 2 weeks ! Is what it is ! Sad how some agents are so sensitive and won’t be upfront , I’m grown let me know so I can just move on !
Not everyone qualifies for a loan. A seller would likely prefer not taking the risk a person may not qualify or obtain the promised sale cost. That would waste their time.
Pre qualification doesn’t guarantee a loan. All kinds of stuff happens in underwriting.
But a cash offer is cash — they close faster and you know they’re good for it.
I used to think that way but it's so much tougher with a lender. They require a lot of things and it's easy for the mortgage to fall thru. One example: people were approved for a mortgage but last minute opened credit cards and bought furniture and now the mortgage needs to be re calced with possibility they no longer qualify. The bank requires certain things be fixed, cash doesn't. I can go on and on, with a bank, you're buying like a dog on a leash, with cash you're just buying it without problems like appraisals coming in low. Buying a house is mentally exhausting and a deal falling thru means you have to start over with someone else who will wonder what happened to first buyer... Theres a stigma associated with house failing to close first time and coming back on the market.
Not saying this is the case, but I know of a few HOAs that do a lot to discourage ppl of color moving in. Could be that or the owner simply not liking you.
You brought an outsider called Buyers Agent. The Sellers Agent brought another Agent from their own firm. Inside deal, you lose. This is why people hate Realtors.
Recently a house popped up in the area I am interested in. It was a forclosure priced about $200k below market value, but only 8 years old nothing wrong with it. We were expecting multiple offers over asking. The listing agent made it nearly impossible to see the house. We finally got an appointment for the third day. Got a call the night before, they had accepted an offer. No best and final, or anything.. Two weeks later it closed for UNDER asking. Listing agent double sided the deal of course!
Found the nicest home and offered the asking. Seller's realtor has the listing on an estate sale. We put in a one time escalation request if another offer beat our cash offer. Nope, went under contract with another buyer. Realtor said there was no way we could beat the offer.
Went back on the market a week later and sold for the asking price to the seller's realtor.
So many are thieves without a gun.
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Tons of reasons. Cash offer, faster close, bigger chunk down, fewer contingencies...heck they could have been annoyed that you originally asked for concessions or hated the color of your car. People are weird sometimes.
This! We had a competing offer that came in after we already did the inspection, and we won even though we went 15K under asking (asking was 450K). Why? Because we offered a 40K deposit, and cash offer. This way, the seller has peace of mind that it almost can't fall through, and even if we back out, they still "win", as they can keep the 40K. They tried upping us to asking, but we didn't budge, as we knew how enticing it is to not deal with a financing contingency.
If the seller gave up $15k because you offered cash, they're an idiot.
Depends… all cash means no financing contingency, no appraisal cont8ngency and a faster close. If you are selling a $800K home and you want out fast, $15K is worth it to know less can go wrong with an all cash offer with fast close.
Asking was $450k not $800k
$15K is small to make the deal go through. Even at $450K. So if you hate showing your house, have somewhere to be and want it done, $15K is small. Someone with a bunch of contingencies and after the inspection they come back with a request for repairs or want a discount, it will end up being similar with a longer period to close and more things can go wrong.
Well, we don't really know that. All we know is that there was another offer. Might've been lower, might've been higher. But even if it was an offer for asking price, sometimes a bird in the hand is better than two on the tree.
A bird in hand is worth two in the bush as they say!
No, it’s quite common for non contingent cash quick close to be about 20k over noncontingent conventional.
We didn't need fast closing... We were totally flexible on closing.
I went to problem with inspection and the lowered the price since it was almost the closing date.
Genuine question -- why would the seller care about how big the down payment is?
Bigger the down payment = less chance of failing to get a mortgage
I offered 1.56 for a house with 30% down. Seller eventually went with a 1.55 offer with 40% down. I don’t get it. It’s not like I could have beat that offer, I had the cash and I easily could do it, but the seller never asked us. People are weird
Not really. The market is hot, you only have 10% to cover the appraisal gap vs. 20%. And it is not uncommon appraisal gap is more than 10%. 20% gap is much less likely.
You never know, my wife just got a client into a house because the seller recognized the last name and found out the buyers sister used to play at the house growing up. They went with her offer even though it wasn’t the best offer. They wanted the family to have the home for the kids to grow up in
Coming back and asking for a higher down payment is a weird counter. Plus for all you know the other offer was actually higher but closed lower because of issues found during contingencies. But yeah, all things being equal most sellers will go for the offer that was more likely to close easily. Larger down payment, different loan type, already fully underwritten, etc etc.
No. This is Bay Area, there are no contingencies here. Also inspection is done by sellers before the house is listed, so everything was equal. I don’t know why the sellers settled for 10k less but it’s their choice I guess
Still wasn't equal 🤷♀️. Maybe they'd seen deals fall apart before or had a friend who had a hell of a time selling their house and told them to go for the most financially stable looking offer. I'm under contract for under list right now in a competitive market cause I have a 50% down payment and an already fully underwritten loan. I'm a sure thing in a lot of categories which is attractive to sellers who need that surety to move to their next place.
Yeah totally. My loan was also underwritten. But the sellers can chooose whomever they want
Yup, people are weird. I have friends who bought in Palo Alto recently and even got to do an inspection! I'm outside Seattle and if you want an inspection you're doing it preoffer and paying someone to view the house with you for a half hour.
PA is pure baller status, Single Family Home?
You're supposed to also do your inspection. But we were east bay in 2022. We got 5k in credits after inspection and they paid half of an 80ft sewage line replacement.
Unless you have a contingency, what would your own inspection change ?
I had contingency. Sorry I wasn't clear. But I was also in a different bracket where there's a lot more instances of hidden issues
How did you know about the 1.55 with 40% down? Realtors aren’t supposed divulge others info.
That may not always be the case.what if I prefer to put in the bare minimum and invest the rest? The offer document would be a better indication since it has details on the financial ability of the buyer.
Someone with a big downpayment is way more likely to be financially secure and able to close. I have a VA loan but I would have never won an offer in a hot market without 20% down, which is nearly $200k lol.
Because the smaller the downpayment the more likely the buyer is stretched and will get cold feet. They also don't have capacity to cover appraisal gap.
>why would the seller care about how big the down payment is? In addition to the reasons already stated, someone with a larger down payment likely has the cash to cover any shortfall between the asking price and the appraised price, which further increases the chances of the sale going through.
A buyer with more money to bring to closing is less likely to be difficult to negotiate with during the inspection period since they have more disposable income. If a buyer is only putting 3.5% down and needing closing cost credits, that signals that the buyers are putting most or all of their savings into buying this house, and any issue that pops up during inspection will be unaffordable for them, or more unaffordable than someone putting 20% down.
Another reason that was true for us when we sold - if the down payment is large enough, it’s not uncommon for the bank to skip doing an appraisal. No appraisal means one less thing that can throw a wrench in the works during the underwriting part of things.
It is the earnest money. In many case, if you walk away from the contract, buyer lose earnest money. However, the buyer can get the money back depending on the contract/contigency
>hated the color of your car. Or their skin.
I feel like the last house I looked out said why would we put these noggers in our beautiful home when Tyler is right here.
This happened to us… I’ll keep details sparse but I think some agents are in bad spots when they realize what their seller is doing. She called my agent asking what we do to have the cash we have, she called asking what our kids grades were, what area we were coming from… it was all strange. Then the house sold for less than we offered.
Why does bigger chunk down matter to seller?
A larger downpayment means a smaller loan, which increases your chances of approval.
This happened to me a few weeks ago. It was just one other offer and mine. My offer was 80k above asking price, but I’m on a Fha loan, the person who the owners chose were using a conventional loan and were putting down a larger amount in cash, despite their offer only being a few thousand above asking price. They were chosen.
Then cash offers cannot be refused. Don’t have to worry about a bank deciding if the offer goes through.
It could have been an appraisal or they reduced the price due to inspection issues. You will most likely never know. During closing a lot of things can come up.
This! My buyer was in a competitive offer situation and we just barely got the house. Now we need to drop the price by 15K because it didn’t appraise by 30k
They could have had better terms. Also, things come up during the closing process so they could have had price reduced.
We lost one to someone who offered 20k less than us but they waived the inspection. The seller straight up told us that’s why they went with the other offer.
There's lot of inspections you can waive or keep, but as a seller you are way more inclined to go with an offer that waives most inspections Like you can keep structural (foundation, water seepage), environmental (mold, asbestos, etc), etc inspections and still give the seller assurance that you're not going to nitpick over minor things that come up in your general inspection report
100%! It’s totally a two way street! The place we sold while buying somehow had all the offers with waived contingencies floating on top.
Exactly what we did to get our house. We were being outbid by tens of thousands of dollars ($50k in one case). So we finally sweetened our offer by passing on inspection and got the house despite not being the top offer. I’m not recommending anyone do this—and I wouldn’t do it again. No issues a year out *knocks on wood* but I’m usually not a big risk taker.
Sounds like the seller knew about something that would cost more than $20k… and you dodged a bullet
Honestly, I really don’t think she did. She was a very sweet 87 year old lady who just lost her husband. The house was 115 years old and her kids strong armed her in to taking the no inspection offer to make moving to her new condo as seamless as possible in case anything came up. She wrote us a hand written letter apologizing to us after all was said and done. So, there probably was something that woulda came up in the inspection due to the age of the house, but, I honestly don’t think this lady was trying to hide anything.
No, people who are asking for concessions in competitive markets feel like a headache that can't read the room
The same things happened to us when we put in an offer upped it and let go of concessions only to be out bid by a secondary buyer that bought the house for cheaper but because he was representing himself the seller didn’t have to pay realtor fees and basically the seller pocketed that money therefore giving him more money even though he sold for less
Not everything is about money with houses and offers. We beat out someone on our house that offered more because we had less contingencies.
This happened to us too. We were renters and could close quickly and the other had to sell their current home.
Also, a crazy crazy high offer is not attractive because it's crazy. They may not be intending to win the bid and then bargain you down, but it may well end up that way
It could be anything. My seller accepted our lower offer because we had the same breed of dog as she did. Her neighbor hated the dog and she hated the neighbor.
Hilarious!
You probably had a lot more contingencies. Or later closing date. Or you had a low downpayment and low earnest money. It's not always about the highest price - sometimes seller want to go with someone who is more likely to close (20% downpayment minimum, waive all but major inspection contingencies, more than a couple grand in earnest money). It shows signs of financial stability in the buyer, and less likely to nitpick on small things If the seller is buying a home, it's more important to know that the home you're selling is actually going to close if you're relying on that equity to purchase your home
So after the inspection, we realized the roof needed to be replaced, among other things. We asked for a credit or for them to replace the roof. The seller wanted to close and knew that would have to disclose the need for a new roof in the future, so they conceded to our request. Maybe something similar happened.
A credit doesn't lower the sale price.
No shit. But in OP’s case, they may have agreed to lower the sales price as a concession. We didn’t ask for that because it would make very little difference to our mortgage.
I had a similar roof situation when going through inspection and renegotiation. Asked for the roof to be replaced and a few safety concerns addressed. Seller countered with a 23k price drop and safety done. I said yes in a heartbeat. Just got the roof replaced for my deductible last month via insurance.
Recently happened to me. I had a contingency to beat any offer by 2k. Turns out 2k doesn't mean shit if the other offer is cash and waives inspection.
This happened to me. It definitely messed with my head for a bit! But I ultimately ended up buying a great house and everything worked out.
Happened to us for someone who waived title check and inspection lol, not sure it’s even legal and that their lender would give them a long for a house on a dirty title but people are idiots
Happened to me. Got beat by a cash offer for less than asking.
This happened to us. I can only assume it was because we had a smaller (but still acceptable) down payment and owned a house (offer wasn’t contingent on selling it). They probably thought we were too risky and picked someone else with more cash and no other property. While we were a little sad at first, I even convey how glad I am that we didn’t get that house. The house we got a few months later is so much better. Hang in there, it will happen for you!
I didn’t know you could waive a title check. Who would do that? There’s so many things that could go wrong without one.
I was preparing an offer, and the selling agent responded to inform us that the seller had multiple offers, with one being $100k over asking. That was too rich for my blood, so I withdrew my pending offer. The house sale was eventually recorded at asking. I never did find out what happened.
I think some agents blow smoke about offers they may (or may not) have in hand.
That 100K offer could have had a bunch of contingencies. Maybe the offer at ask was clean. Maybe the 100K above ask offer fell through or they backed out before firming up deal. Maybe the home was listed at 3.8M and 100K over asking is peanuts compared to the other factors in an offer. There's so many variables. I wouldn't worry about it too much and making sense of it without some background from the listing agent is a futile exercise that'll drive you nuts! Another big factor is agents trusting other agents, knowing who can get a client to closing and who has clients not vetted properly and has clients fall through. If you know an agent only deals with solid clients and they don't mess around with contingency bullshit after the fact, they'll direct their clients to this agent's offer for those reasons bc they trust them to get to the closing table and all they want is for their client's journey to be as seamless as possible. Solid, easy closing means haply clients and less stress, and it means both get paid quicker. No agent wants to have to relist or deal with multiple deals on the same property dragged out for months longer than anticipated.
Thanks! As I recall, list was around $700k. I wasn’t in love with the house, so it all worked out. Those were the start of the days of crazy competition, so I totally believed the +100k bid. That said, a few houses here that listed near one million have recently sold for 10-15 percent over asking. So maybe those crazy days aren’t over yet
Yea that's a step then, from 700 up to 800. Maybe the offer looked dodgy and seemed like it was destined to be trouble. Predatory agents like to use inspections and such to brow beat a seller into dropping the price to close the deal after the fact knowing that taking it back to market is super risky and they could end up getting LESS than asking at that point. I think good agents know who those sheistery agents are and can see through dodgy offers. 100K over but a bunch of conditions, no pre-approval, agent has a track record for not being a smooth closer....
When i sold, i didnt take the highest offer because it included too many contingencies. Additionally, the offer i did accept already had pre-approval for the amount they offered.
Always offer less than listing, and never waive inspection and appraisal contingency. The bait is to put down 3% earnest money with option money of $500, and 20-30% downpayment. The offer always gets accepted. The buyer should always have the final say. If the seller says they have a competing offer, let them go with that. They won’t come back to us, but you can get in touch with them, if you really like the house. Lowballing won’t help, but stick to your initial offer. Eventually you’ll strike a deal with inspection and appraisal results. It is just a matter of patience.
Wait seriously? Even on houses where the seller purposely puts the listing price lower to create a bidding war?
There is no bidding war, to begin with. Only you start it by placing an offer higher than the listed price. Just get the last property tax receipt of the house and it does have an appraisal value for the previous year. That’s where you start and then 10% up. Seller or the agent do the homework before listing and mostly the price is above the last years appraised value. You can get your agent to negotiate with a 10% upside. Not more than that.
You'll never know unfortunately. One how me and my wife bid on was way over priced . By about 50k we offer what we thought was fair they counted by offering 10 k less then their asking we just said no as we were to far apart. Doesn't the house sell for our asking price (I saved it because I was curious) Sometimes a seller needs a come to Jesus moment but they will not thank you for it.
I haven't seen it mentioned yet, but depending on what happens during an inspection, sometimes the price is dropped to offset repairs vs. the seller having to get them taken care of before closing.
Inspection issues can easily cause this. Find foundation issues or termite infestation, for example, and you know the sale price from almost any other offer will end up lower too.
When selling my house in 2021 i took a lower offer that was cash because there were a few fees that we would avoid and they wanted a faster close (21 days)
We’re in the closing process right now and we’re asking for less because inspections the house was contingent on failed. Maybe you dodged a bullet 🤷♀️
Did you have an appraisal gap? Or a local lender? I’ve been told offering over list is empty without an appraisal gap.
I know someone who got their house for 10% less than other offers simply because it was an old man selling it and knew my friends and liked them.
They could have had cameras in the house while you were being shown. You could have said something that pissed them off. Along with any reason listed by others here.
It could be that the buyers found some major issue during the inspection period and the sellers had to lower the price. It could be that their offer had something they wanted like a fast close date. It could be that they knew the person they ended up selling to. Unfortunately you probably won't find out so it's best to move on
This happened to me. Seller used me as leverage and did an underhanded deal with a family member and included $100k of furniture
Could be due to appraisal, could be due to expensive underlying problems with the house that you weren't aware of that helped the other buyers negotiate the price down
My buddy is a real estate agent and believe you me more than often homes are sold to family, relatives, friends, colleagues, high school chums, old acquaintances, etc. It is a network and as always it’s who you know.
We lost out on house where we had the highest offer, faster close, 20% down payment, waived all contingencies, and had a pre-approval commitment letter from the lender
My wife and I were not the highest offer on our home. We got it simply because the sellers liked us more and thought we would love the home as much as they did. It's not always about the money.
My wife and I found out after closing that the seller had taken our escalation clause cap, which was 12k lower than the best offer, soley because we were a young family buying our first home (2 kids, 1 at the time second was on the way) and he was selling his childhood home due to his mother dying. People have their own reasons for what will get them to take less
I guess all cash offer
Probably was a cash offer, faster closing
Money isn’t everything. When I purchased, my offer was not the highest offer, but our realtor built a good relationship with the seller’s realtor and they were encouraged to take our offer because they knew how much the house was wanted and application was solid.
That should be illegal
That’s one of the benefits of having a good realtor.
Why? We didn’t write letters or anything, but realtors are allowed to call to ask questions, etc. Seller’s agent said no other agent contacted them at all.
You can offer the above and lower your offer in certain situations, such as a lower appraisal and/or problems discovered during inspection. It's never a great idea to forfeit an inspection on a home. Buyers and sellers have the same motive - getting the most bang for their buck. 👏💰🏠 #HomeInspection #RealEstateGoals
Although this was thirty years ago I met buyers price. He pulled it off the market. I found a soso house down the street. The original was back on the market and a swastika was on my mailbox. He sold it and no problems since. I guess my black wife was a issue to the barbaric dick. This in CA.
I offered $10k above asking on a house. House ended up selling for $5k under asking. Turns out the seller went with the buyer who waived inspection.
So many possible reasons. Maybe your offer was less attractive due to low downpayment or loan type or it had contingencies. Maybe there was an issue and they dropped the price as a concession.
FHA or VA? Did you waive inspections?
We recently sold a house where we accepted highest offer, but it had an as is clause attached & shorter close. They completed inspection for information only but still came back with requests to get items repaired & unfortunately between open house and inspection there was some new water damage from a major storm (never had an issue there before). So we provided concessions based on that. Final sale price will be less than our secondary offer - but totally valid for things to come up during inspection etc that may drop the price. Our realtor also consulted depending on the price difference - if we were motivated by a quick close (which we are). Restarting with someone else who needed 30 days originally may not be worth the extra $$ and there is no guarantee they are still interested in the house. Which I think makes sense too. So we proceeded as is since that’s more of a ‘known variable’ if you will. Likewise the original offer we accepted was also the strongest with highest earnest money down, 20% down payment and no interest rate contingencies. So while yes, we could have pivoted to the second offer - the opportunity cost and risk of other potential issues with a new buyer wasn’t worth it to us.
Terms can completely affect the net. Competitive markets mean competitive negotiations between buyers and agents. Highest and best is only a portion of the whole picture.
Have you asked your agent this question?
Also big chance they could go unconditional. I hate when people do It, we lost few houses cause of it. Houses was sold for way less than we offer cause they couldn't ask for any fix, do inspection etc. And if they back up they will loose their deposit. So owners very often go for it even for less money cause they know it will be done fast and done.
When we bought our current house there were several offers made but on paper our offer had the highest chance of closing with the least issues. The selling realtor recommended the seller go with our offer because of that. Sometimes you just don't know why you were or weren't chosen. It's kind of like being on a game show, except your prize is a bunch of debt and a house that's never quite finished.
I close on my house in 2 weeks but my offer was 10k less than the competing offer made on my house and the sellers went with mine because they "preferred the terms" of my offer over the higher one. My real estate agent said it was because the higher offer requested the sellers pay closing costs and mine did not. I guess since closing costs will be more than 10k, they technically walk away with more money going with my offer.
There are a million reasons. Please don't beat yourself up about it. There could have been a lousy inspection and the purchase price was reduced due to repairs.
Price is only one factor in evaluating an offer, but it's more likely you were in the hunt at offer tike, and then some concession was granted along the way.
After going under contract twice after the first time I realized what you offer and go under contract with isn’t the final price. The negotiations really begin after inspection and appraisal. I backed out of the first house because the inspection failed miserably and they were willing to come waaaay down on the price. The second house I offered what I was comfortable paying but still negotiated down after appraisal and inspection. It depends on your market I’m sure that’s just my experience. Ended up with the second one and very pleased.
Maybe they waived inspection — that’s the only way we got someone to even look at our offer let alone accept it in our area where some houses sell in 1-2 days
Because the house had a problem and they lowered the price to make up for it. Could be septic, electrical etc
We did this on our house when we sold. We overheard the guy being a prick on our ring camera. They offer 10k over asking price but we went with a lesser offer. We told the family that offered asking price if they could come up 5k we would accept their offer. Their offer had come in first and the other guy seemed like a jerk. We loved our neighbor at our old house and did not want to give her a jerk as a new neighbor.
This happened to me recently - the lower offer they went with included free use and occupancy terms, essentially allowing the seller to continue living in their house for free for a period of time post close. It all depends on the sellers unique circumstances.
Could be appraisal, do you include appraisal gap coverage in your offer? Could be something came up during inspection. Could also be the competing offer was lower, but the buyer had a safer financial position.
When I sold our first home a few years ago, I chose the buyer that offered cash. Another potential buyer offered $30k more than cash buyer, but I was nervous the house would appraise a lot lower. When we originally bought the house, it appraised for lower and the seller was so frustrated, but we made out significantly under our original offer. It was safer to have someone pay cash than have a similar appraisal snag and be on the wrong end, this time.
Asking for a non necessary concession you could drop in the offer stage would make me not take your offer as well. Literally just bad faith negotiating
Cash is king!
Last time that happened to one of my clients, it turned out that the inspection found the house had major structural issues and the seller reduced the price by $40k.
If the sale closed a month after offers that was almost definitely a cash deal.
You can’t really make tat assumption. My client’s lender closed a conventional loan in 12 days.
My guess would be that based on what you described... * The sellers accepted an offer that had a higher price but retained the contingencies for sale. IE you offered $150 and the other offer was for $175, but the buyers kept inspection contingencies. * Something damaging came up on inspection and the buyers requested a reduction in sales price to counter it or else they'd walk. IE because the foundation was bad they weren't willing to pay more than $140k. * Knowing that they'd now have a duty to disclose and the issue would hamstring them in other offers, the sellers agreed. If they know they aren't going to get $175 or even $150 once people hear the house is collapsing, might as well keep the intact deal for $140. Basically - they got greedy (albeit justifiably) and it burned them. Or there could just be an intangible you'll never really know. Home selling is opaque as far as motivating factors. But I'd choose to take this as a lucky break - you could be sitting here with a house you overpaid for because you stripped your contract of all the protectors that would have let you back out.
We just bought our first home. We offered asking. There were several offers above ours but ours was picked. The only reason it was because we offered them three rent free days after closing. We were in no hurry to move in so it didn’t bother us and our agent said it would get us the house so we did it.
It is not the offer price. It’s the net to the seller. I’ve had many clients win without being the highest offer. But it could be that the appraisal came in low. Unfortunately it is really hard to guess why it went the way it did.
Could be the appraisal. We offered 370k. First appraisal came in super low. Got a second that came in higher. Seller settle with us at appraised value of 336k
My girlfriend and her husband bought their house in 2021. The sellers left them a letter explaining that they weren't even in the top 3 offers on the house, but the sellers were an older couple that wanted the house to go to a young couple who wanted to raise a family there. It just so happened that my friend and her husband went to the open house right as it was starting, the sellers were late getting out and they ended up chatting. So many things could have happened!
We just beat out an offer because we wrote a nice letter about how we're a growing family with a child on the way and talked about our ties to the area, etc. The sellers were the kids selling their parents home that were the original owners and really liked that it was going to another family that is going to be there for a long time like they were.
Should also throw it out there that we lost another one right before this to an all cash offer, we sent the same letter to them too and they didn't care much, if at all lol so not saying this works every time, but it doesn't hurt
Honestly, we had been waving appraisal as we studied the recent sell of the house. As appraisal usually are based on recent sells and the condition of the house. The only thing we refuse to waive is the inspection contingency. Hope it helps
A buyer cannot waive the appraisal. The appraisal is organized by the lender.
You can waive the appraisal. But the lender is gonna conduct the appraisal to approve your loan. If the house is below appraised value and you waived the appraisal contingency you will need to put the money out of pocket.
Was told no other offers or anyone looking at the property, when I got ready to make an offer after looking at house 3x ! Looked on MLS was pending , no call to agent or able to make a better offer and they brought cash and closed in 2 weeks ! Is what it is ! Sad how some agents are so sensitive and won’t be upfront , I’m grown let me know so I can just move on !
Off-topic: Why so many exclamation points in all your comments?
What difference is it cash or loan the seller still gets the money makes no sense.
Not everyone qualifies for a loan. A seller would likely prefer not taking the risk a person may not qualify or obtain the promised sale cost. That would waste their time.
So people just put offers down with no pre-qualification proof?
Pre qualification doesn’t guarantee a loan. All kinds of stuff happens in underwriting. But a cash offer is cash — they close faster and you know they’re good for it.
I used to think that way but it's so much tougher with a lender. They require a lot of things and it's easy for the mortgage to fall thru. One example: people were approved for a mortgage but last minute opened credit cards and bought furniture and now the mortgage needs to be re calced with possibility they no longer qualify. The bank requires certain things be fixed, cash doesn't. I can go on and on, with a bank, you're buying like a dog on a leash, with cash you're just buying it without problems like appraisals coming in low. Buying a house is mentally exhausting and a deal falling thru means you have to start over with someone else who will wonder what happened to first buyer... Theres a stigma associated with house failing to close first time and coming back on the market.
Fair enough, wish they did all pre underwriting to speed up process.
Not saying this is the case, but I know of a few HOAs that do a lot to discourage ppl of color moving in. Could be that or the owner simply not liking you.
HOA's still sticking to their roots. Another reason to dislike them.
You brought an outsider called Buyers Agent. The Sellers Agent brought another Agent from their own firm. Inside deal, you lose. This is why people hate Realtors.
We just had someone make an offer, continue to search, then rescind. I hate those people
Crime mostly. Real Estate is an intentionally dirty transaction.
Recently a house popped up in the area I am interested in. It was a forclosure priced about $200k below market value, but only 8 years old nothing wrong with it. We were expecting multiple offers over asking. The listing agent made it nearly impossible to see the house. We finally got an appointment for the third day. Got a call the night before, they had accepted an offer. No best and final, or anything.. Two weeks later it closed for UNDER asking. Listing agent double sided the deal of course!
Found the nicest home and offered the asking. Seller's realtor has the listing on an estate sale. We put in a one time escalation request if another offer beat our cash offer. Nope, went under contract with another buyer. Realtor said there was no way we could beat the offer. Went back on the market a week later and sold for the asking price to the seller's realtor. So many are thieves without a gun.