Home Buying in Castaic>Question Details

Richq, Home Buyer in 91384

We are in competition with 3 other offers on a short sale property. The bank has now decided that they want

Asked by Richq, 91384 Sat Aug 2, 2008

the listing agent to submit the best offer. We do not know at what amount the bank appraisal came in, but we have a good idea of what it could sell for. We've been pre-approved, have the down payment and actually been approved by a bank in two other transactions that fell through. In our best and final offer to the bank and knowing we're in competition, should we ask for closing costs? Previously we've asked for 3%, initially our first offer on this property was 2%. Let's say that another offer has a similar offer - what looks better: having a higher purchase price with closing costs or lower purchase price and less closing costs? This is the proerty that absolutely meets our every need and we want to make sure our offer is the best it can be. We are already offering our highest amount for the purchase, but it's the other items we're unsure of.

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Hi Richq - the bank cares about what they net. So if you offer a higher purchase price, but ask for closing costs to be credited back, they really don't care about that gross number, they look at what they'll net after they give you those closing costs - thats your real offer. Lets say your offer is $400k, but you need 10k back in costs. Your net offer is really $390k to the bank. If another buyer comes in at $390k, and they DONT need closing costs whatsoever, its probable the bank would chose that offer between the two options - since a buyer requiring NO help with closing costs, on the average, appears like a more stable buyer financially who has a higher odd on closing the deal, since they must have some $ in the bank to close the deal. Just remember its about what the bank is netting. If your asking for more closing costs than your competition, but you're still netting the bank a higher price, odds are they would take your offer. A bank asking for highest and best is very common, usually in REO deals, not that common in short sales, but it happens, especially when there are multiple offers as you've indicated. Best of luck with everything!
Web Reference: http://www.TheScvAgent.com
1 vote Thank Flag Link Sat Aug 2, 2008
There are other factors that a bank will consider in an offer and that is your qualifications - credit, employment history, income, reserves, downpayment, and the type of loan you qualfiy for.

If that is the home you truly want, offer your absolutel best. If you can afford the closing, don't ask for it. That in itself can knock you out of the park.

My 1st home was a foreclosure. My bid was $50.00 over anyone else. But my credit, employment, and income was excellent. It can all make a difference.

Any questions, please call me at (661) 255-3335. I'd be happy to help where needed.

Cheryl Garner, Mortgage Expert
Fairview Mortgage Capital, Inc.
Email: cheryl@cherylgarner.com
Web Reference: http://www.cherylgarner.com
0 votes Thank Flag Link Fri Nov 19, 2010
Hi Rich,
I very much agree with Keith's idea that write a letter to the bank, let them know that the house meets your every needs. It worked for my client on REO property.

Best,

Sunny Hermoso
818-357-4178
http://www.sunnyhermoso.com
Web Reference: http://www.sunnyhermoso.com
0 votes Thank Flag Link Wed Aug 6, 2008
Rich
If the property meets your needs, then put yourself in the seller's shoes. You need the best offer.
Best has a couple of criteria (IMHO)
Credit score
Down payment
Contingencies - no sell your property first
- can close in 30 days
- negotiation on repairs vs. as is sale

How long are you planning to stay in the property? If it's really want and meets your needs, I'd also write a letter to that effect. If you can find out what the other offers are, that will help;
If not, have your Rrealtor run some comps and see that the true market value is. I had a client lose a purchase because they "had to have " their price...I think now they are regretting it.

Obviously you are submitting a pre=approval letter that basically says as long as the property appraises, you will get the loan. Try not to submit a pre-approval that is a photocopy, it should address the lender by name and reference the property address.

I'd also include prof of your downpayment funds.,

Good luck
0 votes Thank Flag Link Sat Aug 2, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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Hi Richq;

The SVC agent is right - the higher net price you can pay and the stronger a buyer you are, the more favorable the bank looks upon you. All things equal (the net amount), the more solid a buyer you are the better. Have closing cost shows you are prepared, have more in stake; on top of that, it'd be easier for the appraisal to come in at listiing than 3% higher than listiing.

Sylvia .
0 votes Thank Flag Link Sat Aug 2, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA
MVP'08
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