I got a call a few days ago from a buyer of a home in southern California. He made an all cash offer on a foreclosed property which was countered at a higher price because there was a second offer from and FHA buyer for more money. He agreed to the higher price and then did his inspections. there were a number of issues that made this buyer feel like he paid too much and wanted my advice about how to get the bank the lower the price. The FHA buyer was given back up position for the purchase of this home.
After telling this buyer that I would not interfere with someone else's contract and did not represent him, I said I could tell him what I would try if this happened to one of my clients. FHA loans can have lower down payments than a conventional loan, but they come with conditions. The home must meet certain conditions in order to qualify for a loan. If it were my client I would make a list of the items that would most likely cause an FHA loan to be declined and ask the bank to subtract that amount from the accepted price. What the bank would get in return would be a cash offer that can close in a week and not have to deal with repairing the items necessary to get the FHA loan or putting the home back on the market.
Will it work? I don't know, but certainly it makes more sense than asking the bank t take less money because of the general condition of the property, especially when they have a back up offer.
What works better, get your inspections before making the offer, make the offer based on what you know if the condition of the property, let the bank know what is wrong with the property, and submitting an offer that is not contingent on a property inspection. It is a risk, but probably worth it when you know there are going to be multiple offers and you want to make a strong offer.
Marcy Moyer
Keller Williams Realty
www.marcymoyer.com
marcy@marcymoyer.com
650-619-9285
D.R.E. 01191194
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