Home Buying in 33140>Question Details

Calvarez4000, Home Buyer in Miami Beach, FL

I was told the seller rejected my offer because I have a "pre_approval from the bank to cover 80% of the cost". does this sounds right?

Asked by Calvarez4000, Miami Beach, FL Tue May 24, 2011

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Nowadays, for condominium purchases, most mortgage providers require 25-30% down, more if the condo assn is having financial issues.
1 vote Thank Flag Link Tue May 24, 2011
This is an interesting question. As I am dealing with a very similiar situation with one of my listings. I just received an offer and the buyer had a pre-approval letter from bank to cover 80% of the cost as well. The main reason why seller's are worried is due to nature of the appraisal that bank will order. Bank will request a non local appraiser, someone who does not even know where the location of the home being purchased is without serious help from a navigation system, to come to the property and give his expert opinion on the value of the property. That appraiser will probably not use all the proper comparable sales over the last 6 months and will actually probably use the cheaper ones to bring the value of the home down.
Once appraisal comes in, probably lower than purchase price, then the bank will only lend you whatever the appraisal value of the home is.
Seller's are concerned that if for instance the purchase price agreed upon is, let's say $400,000. Then appraisal comes back with a value of $300,000. Will you come out of pocket for the balance of the $100,000 plus the 20 percent you are already having to supply.
This is the reason why your seller is rejecting your offer, he probably does not think his house will appraise for value of purchase price. Did anyone ask you if you would be willing to pay the difference after appraisal value???
0 votes Thank Flag Link Fri Jun 15, 2012
Some lenders require 50% down payment, it depends what are you buying, if it is a condo there is more risk involve that in a single family in a quiet neighborhood.
0 votes Thank Flag Link Wed Jun 6, 2012
Well now is the time to contact a Real Estate Attorney! If you are able to come up with the other twenty percent, then this seller has no reason not to accept.
0 votes Thank Flag Link Wed May 25, 2011
Why he needs to contact an attorney?
The Seller is the owner, he can acept or reject any offer, that is up to the Seller.
He wants to sell the house to a very qualified buyer, he does not want to waste the time dealing with a Buyer an after 90 days the Buyer does not close.
If you put a 100,000 non refundable deposit, that is a diferent story.
I am a property owner and i dont like to waste time with unqualified buyers.
My personal opinion
I dont like attorneys
Flag Wed Jun 6, 2012
You need to ask these questions: maybe 80% is not good enough for this Seller depending on the price of the property.If it is a $1,000,000, your 20% deposit may not be enough. Maybe he want\s a "cash deal" : no mortgage contingency. Maybe you should ask the listing Agent for an explanation.
0 votes Thank Flag Link Wed May 25, 2011
Good Morning,

As suggested here, you will want to get with your loan officer to ensure that the pre-approval letter you have is properly worded and reflects that you income and credit has been verified. One of the approvals your lender can get you is what is referred to as a DU-Direct Underwriting approval, this would provide you and the seller with your credit scores and other vital information that shows the strength of your offer. Your agent shoudl be able to assist you in obtaining this and properly writing up your offer to reflect the strenght of your offer. As suggested here, you may also wish to provide proof that you do in fact have the 20% downpayment funds available plus and closing cost you would incur. Depending on the type of property you are purchasing and whether you will be making the purchase for investment or as your primary residence, that can make a difference on what you may be required to do with your financing. In today's market , whether it is a regular sale, short sale or foreclosure, the sellers want to ensure that the offer that is accepted is one where it is reasonable to assume that the buyer is a strong buyer and will follow through with the purchase in the shortest amount of time.

Good luck with your home search. If you ahave any further questions please feel free to contact me.
0 votes Thank Flag Link Wed May 25, 2011
It all depend on the type of property that you are buying is and investment property or and owner occupied, is it a fannie mae approved property, will the property appraised at the value that you are paying depend on the type of contingency that the pre-approved letter contain, sometime we REALTOR like to get an approved letter where all the fund are verify and job income, credit history, try to get and approved letter from your lender and that is as good as cash they will have some contingency to protect you, like subject to appraisal subject to clean title. But for you own good get the approved letter you will have better leverage to negotiate the price in any property that you will find.
0 votes Thank Flag Link Wed May 25, 2011
Calvarez,

An 80% loan is OK as long as you have the rest covered in the finance part of the contract. Do you have the other 20% between your escrow deposit and what you are bringing to the closing table?

Debbie Albert, PA
Keller Williams Treasure Coast
0 votes Thank Flag Link Wed May 25, 2011
A Pre-Approval is very preliminary... You should get a DU . Just because you have 20% down doesn't mean you are a Conventional Buyer.
0 votes Thank Flag Link Tue May 24, 2011
Nope, does sound right. What's your buyer agent say?
0 votes Thank Flag Link Tue May 24, 2011
That sounds a little strange unless you're putting 20% down. If you are, I recommend re-presenting the offer with the preapproval and proof of funds. If that doesn't work there must be another reason behind the rejection.
Web Reference: http://www.mysharphomes.com
0 votes Thank Flag Link Tue May 24, 2011
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