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Multiple Offers: A Lender's Perspective

By
Industry Observer with Responsive Pest Control

Hi all: I hope you're well and had a nice weekend!

Last night I received a phone call from a client of mine who put her home on the market and then left for vacation. Upon her return she had 6 offers to consider. My client smartly called her lender and asked me my opinion. She knew that the appraisal was key and could determine what offer was the best one to accept.

After checking comps. for similar homes, we reached the conclusion that the highest priced offer wasn't the best one. We didn't feel confident we could have the home appraised for that much. So that's the bottom line. If value can't be reached via an appraisal, what good does the highest offer do? At least that's a lender's perspective!

I know it's enticing to take the highest offer. Everyone wins in most cases. But, again, if the appraisal comes in low that's a problem and often a deal killer. For my client, she'll probably take the all cash offer even though it was lower.

The encouraging news if you're a seller is we appear to be entering into a lot of multiple offer situations. But do your homework. Take the one where value is possible. Appraisals and underwriting are still pretty strict and I would hate for you to have a deal go awry because you took the highest and best offer.

I wish you well if you're planning on putting your home on the market and as always you are always welcome to

Contact me

 

Posted by

Paul McFadden

Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

I think that makes a lot of sense. I have an offer in where there are 10 offers. My buyer is conventional.  So I would hope that would rule over FHA buyers since my buyer is putting more than 20% down and offering over $20k over the asking price.

Apr 16, 2012 05:05 AM
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

Great news for the seller it is good she had a lender to turn to for advice on selecting the best offer I know this made you feel proud.

Apr 16, 2012 05:05 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

Pat: Thanks. We are all a team. Thanks again!

Chuck: I wish you much success with your offer. Thanks for commenting!

Apr 16, 2012 06:11 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Your post and mine could work well hand-in-hand, Paul.  #1 .. they both stress the importance of working with professionals is vital.  #2 .. listening to those professionals is equally important.  GREAT post you've written and I've definitely suggested it for a Feature.  It contains good and strong advice ...

Gene

Apr 16, 2012 06:38 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

Thanks, Gene. Perhaps we're both good for the business after all. Lol! Have a fantastic day my friend and keep swinging!

Apr 16, 2012 06:41 AM
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

That is a good feeling that the seller relied on your feedback. I dont think in the years Ive been doing this that any seller/buyer has ever asked my feedback on which contract to accept.

Apr 17, 2012 12:37 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

John: It may happen with more frequency from now on. Thanks for commenting!

Apr 17, 2012 02:30 AM