The days of flagrant overbidding may be coming to an end- even for well qualified investors- unless it's an all cash offer. One of our local Ventura Real Estate Brokers who does a lot of business in REO'S has reported a new trend on the part of the seller/ lenders.
Typically, what we've seen with multiple offers is buyers offering far over list price and value just to be "the chosen one". All the while you're head is straining from the HIGHEST AND BEST OFFER guessing game. The logic is that if it doesn't appraise, the seller will negotiate a lower realistic price rather than put it back on the market and start over.
I'll admit to being guilty of this because, after all, I have a selfish streak and I want MY buyer to get the property after I've written 8 realistic offers and gotten knocked out by those pesky over-bidders. It's particularly daunting if you have an FHA or VA buyer...(picture PeeWee Herman in the ring with Mike Tyson- not a pretty sight, eh?)
So now if they're considering accepting an offer absurdly over market value, they require the buyer to ammend out or delete the appraisal contingency and pay the price difference in cash if it doesn't appraise.
In all honesty, I'm surprised they haven't caught on sooner and it will be interesting to see how quickly the rest jump on the band wagon and level the playing for all.
I'd love to hear if any of you have had any experience with this yet!