What gives you the edge when making a bid?

Asked by CoffeeGirl, Grand Haven, MI Sun Apr 21, 2013

I'm curious...Is there anything that gives you an "edge" when making an offer? (This is in regards to conventional sales, as well as HUD/FannieMae/Bank Owned, if there's any differences.)

For example, say there's a house that is listed for $92,500. Only two offers come in (let's assume that the owner is not holding out for more offers). One party offers $91,000, with 20% cash down and the rest financed (pre-approved), the other offers $89,500, but has 60% cash money to put down and the rest financed (also pre-approved). Does the higher bid always win out, or would it make a difference that the other party, while offering less, has more cash money to work with?

Also, does any other factor play into what bid gets preferential treatment?

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Answers

4
Karen Paytas, Agent, Clinton Twp, MI
Sun Apr 21, 2013
Hi L,

In reference to the above scenarios I as a sellers agent would look at the all portions of the contract. What contingencies are there? ie, inspection. What type of financing? The amount of deposit. The timeframe for closing and any occupancy issues. If all points were equal I would recommend for my client to take the higher offer. You can edge your offers by eliminating as many contingencies to the contract as possible and raising the amount of the earnest money deposit.

With most bank owned properties the deal that nets the most to the bank with the least risk of the deal falling through will usually win the bid. HUD has defined deposit guidelines for their offers but again eliminating as many contingencies will give you an edge.

I hope this helps.

Good Luck,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
1 vote
A. Edwards, Mortgage Broker Or Lender, Bingham Farms, MI
Mon Apr 22, 2013
Good advise provided thus far. My experience has shown cash, which goes hand n hand with fast closing timeframe (the next most attractive thing for seller), definitely gives you the upper hand. When securing a mortgage the seller knowing you are 100% pre-approved and no issues are going to arise that will kill the deal is also key; finding a loan officer/mortgage company that issues pre-approvals with certainty is not easy. Realtors that work me know I take my pre-approvals very seriously, so much so that I guarantee a closed loan. Other than that, as already stated, offers can be structured many different ways and the seller usually only cares their net profit.
0 votes
Susan Compag…, Agent, Holland, MI
Mon Apr 22, 2013
I agree with the other answers. Hud is very specific and mostly the net profit is what they look at, but there are a few things you can do. Like research and to have a pre-approval letter properly filled out. With each transaction, we look at all the information to determine our "edge" so to speak. We look at the history of the property, the motivation of the seller, the situation around the sale and many other things as well as the buyers financing options. If you would allow me to assist you as your buyers agent, no charge for it by the way, we look at all the angles and youj will be fully informed. My office is s HUD Listing Broker so I can assist very well with Hud and I am Foreclosure and Short Sale certified as well. Let me know if I can assist. Alot of the work on getting the best deal is working closely with a Buyers Agent so you get to the property first as well. Making Real Estate Dreams Reality, Susan Compagner, susancompagner.com, Carini & Assoc., Realtors, 616-836-2603 call/text
0 votes
Roger Roe, Agent, Holland, MI
Mon Apr 22, 2013
Each property has its own unique pluses and minuses. The offer with the least number of contingencies is many times the offer with the least risks for the seller and looks the most appealing. It may also depend on how anxious the seller is to sell as to how much risk they are willing to work with. Selling banks for foreclosed properties place a lot of emphasis on the bottom line net to the bank. The "edge" you need is best obtained by doing your homework on the property. You and your buyer's agent should research past sales of the property, current length of time on the market, current market value (CMA), current condition and, if possible, talk to the neighbors to see what they know about the property. Decide what price range you are willing to pay and establish the "ceiling" for your offers.
0 votes
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