Best and final: which offer to take?

[Susie]

Somehow I thought it would be easier to decide which offer to take.  Any advice?

Buyer 1:  $350k
* $5k earnest money
* prequalified to borrow $315,000 on a home with $350,000 purchase price.
* mortgage contingency amount:  $315,000, conventional funding
* prequalification is contingent on sale of real estate, although their offer didn't contain such a contingency

Buyer 2:  $350k
* $10k earnest money
* preapproved for $350k 100% financing VA loan 
* no mortgage amount listed in contingency.  Assume house will have to appraise for $340k, which I don't think it will.  No indication as to their ability to close any appraisal gap.

Buyer 3:  $335k
* $5k earnest money
* no prequal. or preapproval provided.
* mortgage contingency amount:  $301,500, conventional funding

Buyer 4:  $340k
* $3k earnest money
* preapproved (expired in March) for $360k max purchase price with 3% ($10,800) down, so max LTV 97%, max loan $349,200 
* mortgage contingency amount:  $329,800, conventional

Buyer 5:  $350k
* $3k earnest money
* prequalified for $350k / 5% down by local credit union
* mortgage contingency amount:  $280k, conventional

The things we're looking hard at include purchase price, and ability to close even if appraisal comes in lower than contract price.  Buyers with larger down payments are better able to withstand an appraisal issue.

I am ruling out Buyer 3, on the basis of being the lowest and also having no prequal or pre approval.

I am leaning toward Buyer 5, but I wish they had a preapproval, and their offer looks stronger than their prequal does.  Buyer 4 looks pretty good, but it's only the 4th highest offer.

WWYD?

[ktw]

Do all of these require an inspection? We sold back in the fall, and this is what happened:

- accepted a full price offer from 1st buyer, had home inspection, inspector "found mold in the basement", we agreed to investigate/remediate, buyers backed out (supposedly because they were nervous about mold), mold guy came in and said the inspector was crazy, there was no mold in the first place.

- accepted a new offer (can't remember, think it was almost full price), had home inspection, inspector recommended that the buyers ask us to open the permit process with our town to verify that the change made by previous owners (so pre-2014) to convert the 2 door garage to 1 door was done properly. We did some research, and refused. They agreed to buy anyway. Two weeks later, they walked away because our taxes were too low, and they were concerned they would go up one day. Yes, I'm serious, that is the reason they gave us.

- accepted new full price offer, home inspection came back with some minor issues, some of which we agreed to fix, others that we declined. Septic inspector tells them that our septic system (brand new when we bought the house in 2014 - previous owners put it in at our request), could fail in 6 years. This is after the 1st two septic inspectors reported no issues, and several septic companies told us that the predictions their guy was making were impossible to make. They wanted us to put in a whole new septic system. We refused to replace something that wasn't broken in the first place. We (grudgingly on our part, but they don't know that) offered them 50% of the cost to replace in the future. They refused. So we offered the full $6K to someday replace it in an effort to be done with the nonsense. They agreed.

- Two days later, we got another offer, over ask, and at that point, $10K more than we were getting from the other people because of the septic concessions. We felt guilty screwing the other people over, so we agreed not to entertain the new offer. The next morning, we got the contract from their attorney which contained a bunch of things we had not agreed to. At that point, our agent went back to the new offer people and asked if they would waive inspection. They agreed, and we sold to them.

Long story short, I learned that earnest money means very little in NY. Our realtor and attorney told us that even if a buyer walked away after we had a fully signed contract, it wasn't a guarantee we could keep their money, and if we wanted to, we might have to take them to court to get it. Forget about before the contract is signed (which is after inspection in NY). Based on what we went through, even the buyers with lower offers would look better to me if any of them would waive inspection.

ETA: I would *never* agree to waive an inspection myself, I think it's crazy. But apparently, there are others out there who will agree.

[Susie]

Ugh, honestly, horror stories aren't helping with the decision at hand!  Any decision we make could go wrong, what I am looking for is help making the best decision we can on the facts we have.  There's no crystal ball, unfortunately.

All of these buyers have an inspection contingency. In our local market I have never heard of anyone waiving it. I know it works differently elsewhere.

It's also not universal in NY to wait to sign a contract after inspection. This may vary by local market, but here (also NY) we sign contracts before the inspection, setting a timeline in which the inspection has to happen, and including a contingency that buyers can walk with their earnest $ if an inspection item comes up that timely and is "substantial," and sellers are unwilling to remediate.

Bottom line, the offers on the table are all essentially the same w/r/t inspection. The only difference is that Buyer 5 raised the definition limit of "substantial" issue to $3500, vs. $1500.

[ktw]

Apr 19, 2021 10:42:15 GMT -5 Susie said:

All of these buyers have an inspection contingency. In our local market I have never heard of anyone waiving it. I know it works differently elsewhere.

It's also not universal in NY to wait to sign a contract after inspection. This may vary by local market, but here (also NY) we sign contracts before the inspection, setting a timeline in which the inspection has to happen, and including a contingency that buyers can walk with their earnest $ if an inspection item comes up that timely and is "substantial," and sellers are unwilling to remediate.

Bottom line, the offers on the table are all essentially the same w/r/t inspection. The only difference is that Buyer 5 raised the definition limit of "substantial" issue to $3500, vs. $1500.

Interesting. In that case, I agree with your reasoning on Buyer 5 being the strongest, more so with the added information that there has to be an issue costing more than $3500 for them to walk, as opposed to the others only being $1500. Hopefully your inspection process will go much more smoothly than ours did in this crazy, volatile market.

[ktw]

Apr 19, 2021 10:42:15 GMT -5 Susie said:

Ugh, honestly, horror stories aren't helping with the decision at hand!  Any decision we make could go wrong, what I am looking for is help making the best decision we can on the facts we have.  There's no crystal ball, unfortunately.

All of these buyers have an inspection contingency. In our local market I have never heard of anyone waiving it. I know it works differently elsewhere.

It's also not universal in NY to wait to sign a contract after inspection. This may vary by local market, but here (also NY) we sign contracts before the inspection, setting a timeline in which the inspection has to happen, and including a contingency that buyers can walk with their earnest $ if an inspection item comes up that timely and is "substantial," and sellers are unwilling to remediate.

Bottom line, the offers on the table are all essentially the same w/r/t inspection. The only difference is that Buyer 5 raised the definition limit of "substantial" issue to $3500, vs. $1500.

Understood, and I'm sorry. I don't actually consider them horror stories. In the end, we were on the market about 2 months from listing to contract signing, and while it was very stressful at the time, we also spent very few days on the market without an accepted offer in hand. The most upsetting one was the 2nd buyers walking away for basically no reason, and in that case, our realtor already had the 3rd buyers in hand before he told us the 2nd had walked. I just wanted to highlight why a waived inspection would possibly mean more to me than even a $15K swing in offer price.

I don't think you can make a wrong decision with what you have listed here. And, if there were issues with inspection (or anything else), you'd have 4 people your realtor could go back to. In this market, it's most likely they'd all still be waiting around to find a house anyway.

[icedcoffee]

Buyer 5. ktw had some really good points that essentially buyers can walk at anytime for any reason. The good news is that these people really want your house so they will try hard NOT to walk. And if they do then, well, you have 4 other offers that might still be interested if it did fall through.

Go with buyer 5 and try not to worry to much.

[kadams767]

Do you know what your neighbor's accepted offer was for and if so, how their appraisal came back yet?

[redheadk]

I agree with Buyer 5. If necessary, can your realtor prod Buyer 2's realtor for more information about their ability to close the potential gap? Though with 100% financing, that seems less likely.

[hbomdiggity]

Congrats on the offers!! But yeah, that’s not an easy comparison and decision.

With your update, that makes me lean towards #5 as well. If I understand the mortgage contingency this gives you the most breathing room on appraisal, though with the 5% down I’m a little concerned they still may not have too much cash on hand. But upping the inspection contingency is significant to me.

I’ve mentioned before that when we sold buyers used inspection to try and get back to list. List was $850 and offers were $875 (California, lol). We accepted the all cash offer and the inspection came back with $40k in concessions. It was ridiculous and included things like minor cracks in the concrete sidewalk. We said no and went to offer #2. They came in with $30k of concessions that was largely foundation related - basically a foundation contractor looking for work said that due to the age of the house (1920) there “could” be issues. We hired a structural engineer and the buyers wouldn’t accept it. At that point we were already living in another state and under contract to buy. We gave them $25k. They didn’t do a thing to the foundation and finished updating the kitchen (which all the realtors we interviewed told us not to bother with). So yeah, I’m bitter about it.

[Susie]

Apr 19, 2021 11:04:05 GMT -5 kadams767 said:

Do you know what your neighbor's accepted offer was for and if so, how their appraisal came back yet?

$330k contract price, and they're only a week ahead of us so no appraisal yet.

[k3am]

Can your agent call their agents and ask for their ability to cover the delta if the house doesn't appraise? I know that happened when we bought our house we knew it would appraise for far less than we offered, so the seller asked, and we showed them statements that proved we could cover the shortfall. But we also live in crazy real estate land, so I don't know if doing that would be common elsewhere.

[Susie]

So, it turns out that Buyer 5's agent made a mistake in the contract, and they're doing 5% down, not 20% down.  But we're going with buyer 5 anyway.  Eeek!

Buyer 1 was the next choice -- same contract price and 10% down.  But they have a contingency for sale of their condo that they can't/won't remove.  Supposedly they're through inspection/appraisal, etc., but we just aren't willing to bear the risk of a 3rd real estate transaction (our purchase, our sale, and then their sale) when we have another buyer offering the same price.

These weren't deciding factors, but are nice perks -- Buyer 5 raised the limit on majors for the inspection, and also offered a better closing date for our schedule.  They wanted 6/18.  We were hoping to do late June, giving us a month-ish to do floors/paint at the new place, and also let DD finish the school year out with her routine intact.  If they would bump one week later to 6/25 that would be great, but we're in the right ballpark.  Buyer 1 wanted 5/28, again tied to their condo sale, which is right on top of our (5/26) purchase date.  Decidedly not ideal.

Buyer 5 has been aggressive all along.  They were the ones who offered $330k with escalation to $350k on day 1.  Then for best/final, they jumped straight to $350k.  I respect that game.

Apr 19, 2021 13:02:36 GMT -5 k3am said:

Can your agent call their agents and ask for their ability to cover the delta if the house doesn't appraise? I know that happened when we bought our house we knew it would appraise for far less than we offered, so the seller asked, and we showed them statements that proved we could cover the shortfall. But we also live in crazy real estate land, so I don't know if doing that would be common elsewhere.

Our agent did have that conversation.  They're willing to contractually agree to cover the first $5k of the delta.  We decided to be good with that.  Frankly our original goal was to get $330k, and if we need to do a little bit of a seller's concession to avoid losing the deal, well, we will still probably hit or clear the original goal.

[boiler717]

I think Buyer 5 is the right choice! Did they give any info on why they haven’t been prepproved?

[lessel]

I was going to say buyer 5 before I saw your update. I feel like when we looked at mortgage loans for our first house, the local credit union we looked at didn't do pre-approvals, they only did pre-qualifications. So maybe that's a credit union thing or at least varies from lender to lender? But man, that was more than a decade ago so I might not be remembering correctly.

Good luck!

[simpsongal]

Good luck! agreed that buyer 5 looked the best, esp after all the info you provided!

[Susie]

Ugh, I'm so stressed out...

So we accepted Buyer 5, and are now in attorney review.  We got their attorney's list of changes to the contract.  Among them, they want a contingency in it for the appraisal, that if it doesn't come back at $345k, they can cancel the contract.

That is not what we meant by the $5k term in the contract.  What we meant, is that if it appraises for, e.g., $330k, they need to come up with the cash to get to $335k, and we'll figure the rest out from there.  (Mentally I am expecting that a seller's concession may be needed.)

The house is not going to appraise for $345k, full stop.  My best guess is $325-335k.  That's why we asked $325k!  You don't get to "temporarily" offer $350k to win the bidding war and then say oh, but if it doesn't appraise you (sellers) bear the risk and we walk.  And maybe that doesn't happen until June.

We've told them no, we're not going to agree to that term.  We'll work with them in good faith, but we're not going for that.  I just don't need this in my life though.

[origami]

Ugh that’s so stressful. I’m sorry.

In my area I’d expect the buyers to eat the difference (at least part of it). But I’d also expect them to have said that in the offer. The fact that these people all did not, and it doesn’t appear that they can, makes me think you’ll end up very close to the appraised value. Hopefully for your sake your buyers are tired of losing bids and are more inclined to play ball. I know I would be.

Before our local market went all nuts, it was a thing that people would offer a crazy high amount and rely on the appraisal or inspection to knock the price back down. Our realtor was even trying to sell us as buyers by saying we’re not like that. That ended up not mattering because so many offers were cash only or waived inspections. It sucks.

[expectantsteelerfan]

I'm sorry, that's so stressful. When is the appraisal and inspection? Hopefully it goes better than you are expecting, although I'm sure it's good to have realistic expectations. If the house doesn't appraise and they are unwilling/unable to pay the difference, are YOU able to make the choice to back out of the sale at that point if you want to? Are any of the other offers written in a way that would allay your fears with both the appraisal and the inspection, even if it's one of the slightly lower ones?

The inspection for the house we're under contract for is on Monday, and I know I'm a nervous wreck about it. Luckily for us, appraisal isn't going to be in issue for this. But I don't even want to think about what the inspection on our current house will uncover when we get to that point. My realtor was telling me about a house here that was listed for $450K, and sold for $515K after 18 offers, and there is no way it's going to appraise for that.

[Susie]

Apr 23, 2021 19:31:46 GMT -5 expectantsteelerfan said:

I'm sorry, that's so stressful. When is the appraisal and inspection? Hopefully it goes better than you are expecting, although I'm sure it's good to have realistic expectations. If the house doesn't appraise and they are unwilling/unable to pay the difference, are YOU able to make the choice to back out of the sale at that point if you want to? Are any of the other offers written in a way that would allay your fears with both the appraisal and the inspection, even if it's one of the slightly lower ones?

The inspection for the house we're under contract for is on Monday, and I know I'm a nervous wreck about it. Luckily for us, appraisal isn't going to be in issue for this. But I don't even want to think about what the inspection on our current house will uncover when we get to that point. My realtor was telling me about a house here that was listed for $450K, and sold for $515K after 18 offers, and there is no way it's going to appraise for that.

Inspection is scheduled for 5/1.  Appraisal doesn't have a set time frame, which is part of the problem.  It could be weeks... a month... 1.5 month... It would just happen at some point in the course of their mortgage approval process.  We got ours back on 4/12, after applying for the mortgage/locking rate on 3/29.  I forget what day I gave the go-ahead to our lender to schedule the appraisal (I had to do that because we had to pay for the appraisal up front).  I've been really on top of getting everything done ASAP though, and 2 weeks is probably way faster than many other buyers might get one back.

As of Sat (after a couple conversations and go-rounds already), Buyer's attorney said: 

As for the low appraisal, Purchasers agree to delete “This Contract is contingent upon the property appraising for at least $345,000.00.” However, Purchasers require that the Purchase Price be, at most, $5,000.00 over the appraisal amount, and in no event over $350,000.00. In the event the appraisal is below $345,000.00 and the parties cannot agree on a reduced Purchase Price, Purchasers reserve the right to cancel the contract. Please let me know if this is agreeable.

No.  It's not.  We accepted an offer for $350k, over two other $350k offers, and we are not willing to now revise it down to "appraisal + $5k up to $350k," especially since we have no way to know:
* who's doing the appraisal,
* what comps you're feeding this appraiser,
* what communications there might be with the lender/appraiser pushing toward a low appraisal,
* when this appraisal might happen,
* etc.

Our RE agent is getting super annoyed, as are we, and she reached out to the buyer's agent today.  He claims he has no worries about the appraisal... great, so remove the contingency!  She told them they have until tomorrow morning to do so or we're going to cancel the contract and go with another buyer. We've all had enough. I don't know if I care anymore if they remove the contingency, dealing with these people through inspection and for the next 2 months sounds like hell.

We will probably go to buyer #1 next, and see if they can delay closing to mid/late June.  They were planning to do 10% down, which positions them better to weather an appraisal issue.  If yes, great.  If no, we'll check in with buyer #2, who we know really wants our house.  They were planning to do 100% financing with $10k earnest money.  We would go into that with the knowledge the a seller's concession may be necessary in the end, but we think they will be better to deal with, and we might end up in roughly the same place anyway.

I just want to get to a place where we feel like we're on solid ground.  We are representing ourselves from the attorney standpoint, so we're probably a little closer to all these negotiations than if we'd hired someone to do it.  Maybe that was a mistake from a personal stress standpoint, but oh well.  At least we feel personally comfortable that things are on track with the seller's attorney and that's all green lights.  I keep telling myself that there are more buyers out there for our house than houses for us, so we're gonna be fine eventually.

[konapoppy]

Those buyers are ridiculous. Glad you have a plan to go to the next offer if they don’t agree. Even if those offers are now lower, it sounds less stressful.

[dr.girlfriend]

Susie ,I'm so sorry, I don't know that much about real estate stuff but offering high and then trying to backtrack sounds truly ridiculous.

[redheadk]

I would move on to the next person now. Tell their lawyer that it’s clear their initial offer was not made in good faith and that you will not work with dishonest people. Go to the next. They are going to be difficult every step of the way.

[origami]

Im not sure you will be able to do better than the appraisal + $5K. you know the comps really well so you’re worried about the appraisal, but the buyer’s realtor seems to think their offer is in line with a higher value. And he may be right since you had more than one with the same amount. Getting $5K over from buyers who can’t put 20% down is pretty good IMO. I don’t think any of your other buyers will be able to do more than that, though I would certainly ask if it comes to that.

[aspentosh]

Oof, what a crappy move on their part. I would likely also move on since it doesn't seem like they will be all that fun to deal with for the next couple months. Plus knowing a set number based on an offer seems like it would give you peace of mind vs appraisal plus $5k up to the number THEY ACTUALLY OFFERED.

And this may be waaaaay off base, but they also seem like the type to potentially nickel and dime for repairs found during the inspection.

[Susie]

H talked to their attorney this morning.  Their attorney gets it, she diplomatically said that she's not sure her buyers totally understand the purchaser/seller dynamic in our town right now, which is an extremely strong seller's market.  She pins a lot of the mess on their agent, who seems pretty shady all around.  She's going to explain to her buyers that they're probably not going to get a house anywhere in our town with that kind of contingency in the contract.  That said, she doesn't think they have the reserves to do much better than appraisal + $5k.  

As origami said, I don't think any of our buyers is positioned to do vastly better than appraisal + $5k.  The best positioned are probably buyer 1, because they had 10% down (vs. 5%), and will have just sold their condo on 5/21.  However, they're still not VASTLY better capitalized, and there's the difficulty of them wanting to close earlier than we're ready for.  We're not buying until 5/26, and we can't move out early and float with 2 kids and a dog in order to match their timeline.  Plus we had plans to redo floors and paint before move-in.  IDK how flexible they are, or what their Plan B is for after they sell.

$335k or $340k might be all we actually get at the end of this, and I guess I'm ok with that.  I mean, we only asked $325k, how could I not be?  I just don't want this bullshit "we can walk if we don't like the appraisal" bullshit.  The other side is going to get back to us today with their decision.  H was also going to see whether they would be amenable to considering FHA financing instead of conventional.  The slightly lower down payment requirement would stretch the cash they have just a little further, to get just a little closer to contract price.

If our buyers stick, I have the same fears as aspentosh about nickel and diming on the inspection.  HOWEVER, they were the only buyers who raised the limit of "majors" on the inspection to $3500 from $1500, so in that respect they're actually the most constrained on how much havoc they can wreak.

I will be so glad when this is over!

[purplinsky]

Apr 26, 2021 9:07:07 GMT -5 Susie said:

  I just don't want this bullshit "we can walk if we don't like the appraisal" bullshit. 

I'm honestly confused by this expectation that the buyers are forced to stick with the offer price if the appraisal comes back vastly lower. When I bought houses (2 years ago and 8 years ago) it was standard in all the offer contracts that the appraisal step was one of the 'walk' milestones in the process meaning if the house didn't appraise for the offer price and an agreement between the parties could not be met the buyer could walk. There was one house that was listed super high and the seller was not willing to budge. I made an offer that was about $50K less than he wanted he said no and then came back a week later to see if I would consider a price at $40K less than his list price. I agreed but the appraisal came in at my original offer ($50K less than asking). He was unwilling to budge or even compromise on the price and I was unwilling to bring the $10K over appraisal to the table. I was putting down 25% for the down payment but that had no bearing on whether or not I was willing to pay more than the house was worth.

He ended up selling the house for $3k less than my original offer.

I guess I was just under the impression that standard offers are made in good faith and that if the appraisal comes back lower than the offer price that the two parties have to agree on a new price (whether that be the appraisal value or somewhere in between appraisal and original accepted offer), the buyer needs to come up with difference, or the buyer can walk. That's just been my experience with the houses I've bought.

Also, just so you know, the buyers shouldn't have any interaction with the appraiser and they certainly aren't supplying comps to them. The appraiser is required to be an independent party so you should not worry about the buyers influencing or getting the appraiser on their side or something like that.

[amandakisser]

Apr 26, 2021 10:45:58 GMT -5 purplinsky said:

Apr 26, 2021 9:07:07 GMT -5 Susie said:

  I just don't want this bullshit "we can walk if we don't like the appraisal" bullshit. 

I'm honestly confused by this expectation that the buyers are forced to stick with the offer price if the appraisal comes back vastly lower. When I bought houses (2 years ago and 8 years ago) it was standard in all the offer contracts that the appraisal step was one of the 'walk' milestones in the process meaning if the house didn't appraise for the offer price and an agreement between the parties could not be met the buyer could walk. There was one house that was listed super high and the seller was not willing to budge. I made an offer that was about $50K less than he wanted he said no and then came back a week later to see if I would consider a price at $40K less than his list price. I agreed but the appraisal came in at my original offer ($50K less than asking). He was unwilling to budge or even compromise on the price and I was unwilling to bring the $10K over appraisal to the table. I was putting down 25% for the down payment but that had no bearing on whether or not I was willing to pay more than the house was worth.

He ended up selling the house for $3k less than my original offer.

I guess I was just under the impression that standard offers are made in good faith and that if the appraisal comes back lower than the offer price that the two parties have to agree on a new price (whether that be the appraisal value or somewhere in between appraisal and original accepted offer), the buyer needs to come up with difference, or the buyer can walk. That's just been my experience with the houses I've bought.

Also, just so you know, the buyers shouldn't have any interaction with the appraiser and they certainly aren't supplying comps to them. The appraiser is required to be an independent party so you should not worry about the buyers influencing or getting the appraiser on their side or something like that.

In normal times, what you are saying is true for an appraisal - buyers can (and should) ask for a price adjustment because the bank won't loan them more money than the home is worth. 

However, it is a STRONG seller's market right now and that means if buyer 5 can't/won't come up with the additional $5k to bridge the appraisal gap...someone else will. This is why it's really tough for first time homebuyers to purchase in this market - homeowners who have sold homes will have a pretty decent amount of cash to put toward a home, and when that happens and they finance WAY less than the current price, then the appraisal really doesn't matter because they already have enough cash to cover the gap (hope that makes sense!).

If buyer 5 refuses to bridge that gap then Susie, has the right to go with their backup offer. I am a realtor and I basically only win bids for my clients right now who have a TON of cash down It's really really tough for anyone who can't get a conventional loan or come up with a large down payment.

[marie]

purplinsky,There are 5 offers OVER asking. This is obviously a different situation.

[purplinsky]

Apr 26, 2021 11:09:20 GMT -5 amandakisser said:

Apr 26, 2021 10:45:58 GMT -5 purplinsky said:

I'm honestly confused by this expectation that the buyers are forced to stick with the offer price if the appraisal comes back vastly lower. When I bought houses (2 years ago and 8 years ago) it was standard in all the offer contracts that the appraisal step was one of the 'walk' milestones in the process meaning if the house didn't appraise for the offer price and an agreement between the parties could not be met the buyer could walk. There was one house that was listed super high and the seller was not willing to budge. I made an offer that was about $50K less than he wanted he said no and then came back a week later to see if I would consider a price at $40K less than his list price. I agreed but the appraisal came in at my original offer ($50K less than asking). He was unwilling to budge or even compromise on the price and I was unwilling to bring the $10K over appraisal to the table. I was putting down 25% for the down payment but that had no bearing on whether or not I was willing to pay more than the house was worth.

He ended up selling the house for $3k less than my original offer.

I guess I was just under the impression that standard offers are made in good faith and that if the appraisal comes back lower than the offer price that the two parties have to agree on a new price (whether that be the appraisal value or somewhere in between appraisal and original accepted offer), the buyer needs to come up with difference, or the buyer can walk. That's just been my experience with the houses I've bought.

Also, just so you know, the buyers shouldn't have any interaction with the appraiser and they certainly aren't supplying comps to them. The appraiser is required to be an independent party so you should not worry about the buyers influencing or getting the appraiser on their side or something like that.

In normal times, what you are saying is true for an appraisal - buyers can (and should) ask for a price adjustment because the bank won't loan them more money than the home is worth. 

However, it is a STRONG seller's market right now and that means if buyer 5 can't/won't come up with the additional $5k to bridge the appraisal gap...someone else will. This is why it's really tough for first time homebuyers to purchase in this market - homeowners who have sold homes will have a pretty decent amount of cash to put toward a home, and when that happens and they finance WAY less than the current price, then the appraisal really doesn't matter because they already have enough cash to cover the gap (hope that makes sense!).

If buyer 5 refuses to bridge that gap then Susie , has the right to go with their backup offer. I am a realtor and I basically only win bids for my clients right now who have a TON of cash down It's really really tough for anyone who can't get a conventional loan or come up with a large down payment.

I understand all this and agree with everything you said; I get that it's a seller's market right now. I think I'm just confused with the angst towards the buyers that they'll walk if the appraisal comes back more than $5K when that's within their rights to do so. 

[origami]

Apr 26, 2021 11:09:20 GMT -5 amandakisser said:

However, it is a STRONG seller's market right now and that means if buyer 5 can't/won't come up with the additional $5k to bridge the appraisal gap...someone else will. 

Do you think one of those other 4 buyers has the cash to do better than an appraisal + $5K though? I don't b/c I'm assuming they'd have made a better down payment if they had that kind of cash, or they'd have said that in their original offer. 

If there was a buyer 6 with a mountain of cash this would be a no brainer, but I can see why Susie is really thinking through the pros/cons of every buyer. It's not cut and dry when you don't have a bid from Scrooge McDuck and his pool of gold coins