In this case where it was "double dipped" there were likely other factors involved, but in my experience, banks look at deals like this:
#1 - Cash
#2 - Conventional loan
#3 - FHA/VA
See if you can get a different loan if possible, as many asset managers get leery of FHA and the higher safety standards (mostly perceived) than cash or conventional.
As confusing as this is, there are other factors that can make a positive impression on the seller and can carry more weight than the sale price.
Quick closing date, no contingencies, cash deal are a few consideration that may have caused the seller to accept less money for the sale of the home. The seller can elect to sell their property to anyone regardless of the offer amount...it is their choice.
You're correct; however, if the seller has already lost $32K via a combination of declining market value and holding costs, then perhaps the immediate 32K in cash appeared to be "a bird in hand" for that seller.
I suspect the seller probably went with the other offer, because your offer was made with FHA financing. Some sellers--especially ones selling homes with issues that might not pass a FHA inspection--simply opt to sell to buyers with other forms financing (especially in the case of all-cash offers).
Perhaps something was discovered in the home inspection that brought the price down further, such as broken water pipes.
Coldwell Banker ALM
"Sharpen your pencil before you get there"
Essentially, banks will only counter if they deem the offers to be close enough -- on my bank listings, it's generally that deals need to be within 5% of each other...but each specific end lender has different criteria for determination.
Keep in mind these homes are already at a severely depressed price. Banks know the market is depreciating continually, so if you REALLY like one, I'd advise you bid NO LESS THAN full price net, or maybe even $1000 or so more.
That way you're really pressing the issue as to WHY the bank wouldn't take a FULL price offer, etc.
Unless there were other terms that were not favorable about Chris offer such as low down payment or contingencies.
There are many many factors come into play when submitting an offer for all parties review difficult to state unless both offers are reviewed compare all why's.
Dallas Realtor and Consultant, Mortgage Loan Officer, Lecturer regarding Credit Repair
â€“ Lynn A. Crosby
To answer your question-no the seller may not always take the highest offer for reasons listed below. A clean offer (no contingencies) closing sooner than everyone else could be the difference even if the price is lower. I had a client win a bid on a bank owned property when he did not have the highest offer because he was not doing an inspection.
If the agent served as a dual agent representing both the buyer and the seller in the transaction, greed may have taken over. Are you positive that your offer was presented to the seller? Is it a bank owned home? I find it hard to believe anyone would take a 20% lower offer b/c you are using FHA. There are no seller mandated fees, so unless the property needed major repairs, I cannot see why they would care about that.
You may contact the Dept. of Licensing in your area as well as the board of realtors to file an ethics complaint if you feel your offer was not presented.
Did you have a buyers agent submit it on your behalf? I'll get into the rest of the questions in our emails...
Derek Bauer, Associate Broker / Realtor
Real Estate One