Is your buyer willing to pay the difference between the appraised value and what their offer is for?When it comes to cash and conventional financing, the sellers are finding another loop hole.
>>forcing higher bids, countering the appraisal contingency out, THUS: no price reduction = Banks gets more for the property, Buyer feel like they are getting screwed! Win-win for the banks - once again!
Is this a good method or is it adding to the False Market Value issues
You can look at this a couple of ways:
- Did they list low on purpose?
- Does the seller no have any trust in the appraisals they are getting?
- Is this just a way to get more money, more money for the property?
- Do they like getting multiple offers so they have buyers compete, then not have to reduce the price when the appraisal comes in at FMV
- Is this an insult to the Fair Market Value process?
Just a while back this was a question that not many would ask. But nowadays… it is starting to become a habit. In the last couple of weeks I have had several listing agents ask me this. I am not sure if they even submitted the offer to the seller before they ask this question.
Here I am out there trying to education my buyer that the listing agents are listing properties low in order to get attention to the listing and to pull in more offers to submit multiple offers to the seller. This does a couple of things:
- Makes the listing agent look good to the seller
- And it gives more money for the property to the seller
- Plus one more thing…. It is messing with the market – making it look like the market is going up when it is really being forced up with this and other tactics.
When you present this question to a buyer, they turn around and look back at you and ask..
- why would I want to do that?What is the purpose?
- Doesn’t that mean that I am purchasing a house that I will be in the hole for right off the bat?
- How much over the appraised value am I expected to pay?
This type of buying is leaving the buyers scratching their heads wondering is it right, what should they do, what next and although these questions are being asked ---> there are no real answers that make sense for this approach. Is there?
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