HAVE TO USE, equates to weak, weak contingency filled purchase offer.
A risk adverse seller should kick such offers to the curb immediately.
I know. That sounds harsh. So, how can this reality be sweetened?
Compensate the seller for taking the home off the market for a weak, weak, weak buyer.
That $500 will never be seen by the buyer again EXCEPT as a credit on the closing docs. It's non-refundable.
Nancy, it is important for you to know how the appraisal will come in and provide the seller the assurance this will not become an obstacle. Appraisers are lazy. Give them the correct data for real comparable properties to assure the right outcome. No, I did not say have a value discussion, that's illegal, but I did say make it easy for the appraiser to make the right calculations. You can know this number beforehand. Do your homework.
Remember, the value must cover the piled on closing costs.
Do a bit of research regarding the home to be purchased. Is it a flipper house? Residence with no outstanding mortgage? Estate cash out? Home owner needs equity to start the next chapter of their life? You can calculate the profit the investor is realizing. You also know what the minimal profit margin the investor will accept. Make sure the USDA, appraisal, piled on closing costs do not violate the investor threshold. If it does there will be very little conversation....but if it's a newbie investor type...advantage Nancy.
Finally, how long will it take to close in Farmingham MA? We're on the brink of eight weeks here in FL via the big banks and six weeks with the second tier banks. Time to consult with your peers to get a heads up on the possibility of this becoming an issue. If necessary think along the lines of FLEXIBLE closing date rather than eight weeks or longer from offer acceptance.
As we all know, real estate is not a science.
You are about to engage in the creative arts element of real estate.
Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
(You might want to reaffirm the property's USDA status. I was recently informed that the USDA area designations had changed.)
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That said, whatever the buyer can do as far as a deposit (any monies they have on hand) should be ok, even $1500 or so I've seen done. With the question on the seller concession to cover cost that would depend on the market and how motivated the seller is. We do USDA loans here at EverBank if you client would like to shop. Just click on my profile for info.
As you are an agent in the area. I wanted to give my thoughts on your question. The first concern of any seller will be the amount at risk. I have see other agents put 3% down at P&S knowing that it is 100% financing and the buyers get those funds back at closing. Problem is most USDA buyers do not have those kinds of funds. Appraisal is similar. Please look me up on linked in for more information about me. Also if you have any questions give me a call. 774-573-0329
NMLS NUMBER 10321
It is all about terms and conditions. If you are giving terms and conditions that are favorable to the seller with a strong pre-approval then you should be able to put a deal together.
You may have trouble competing with a buyer who can put a sizeable deposit down on the PS. I assume you are not putting down more than $500.