Your Down Payment May Be Stopping You From Getting Your Offer Accepted

Welcome to the Wild West of real estate where we are experiencing one of the most incredible seller markets of all time. Home sales are brisk to the say the least and competition to buy is intense. Orange County homes priced under $700,000 are typically getting multiple offers within a few days of being listed. This is also the case in many parts of the country. So let’s have a close look at a key item that may just set your offer apart from the competition – the down payment. There is no doubt that the offer price is very important, but buyers can really set themselves apart from the competition by putting more than 20 percent down. The reason is simple – buyers with higher down payments can overcome appraisal issues which are commonplace in today’s market. This may be the difference in getting your offer accepted!

Strong Down Payments - Overcome Potential Appraisal Issues

Both sellers and their agents are well aware that as they look to maximize the sales price on a given home, there is a good chance that it won’t appraise. With prices moving higher and strong buyer demand willing to make full price offers on homes – and often above asking – appraisal challenges have become a top concern for sellers. As a result it should come as no surprise that sellers favor offers that can overcome an appraisal shortfall – that means an offer with more than 20% down payment. Cash offers are also a plus in this case but a strong buyer with more than 20% down can also compete and be in a position to overcome an appraisal shortfall. This is important as most lenders will lend on a conventional or conforming  loan if a buyer has 20% or more of the “appraised value” as a down payment – not to be confused with 20% of the sales price or offer price.

If you are looking to buy or sell a home in Orange County, CA I would welcome the opportunity to work with you. You are welcome to call me anytime at 949-500-0484, or email dave@ventanacoastalproperties.com.