Does anyone have any advice on how to put down an attractive offer that will get accepted in this ridiculously hot market? Looking at homes 200-265K, I am preapproved for a loan from two lenders already, and am very flexible on when to close.

I've noticed with loan offers on homes, sellers are worried that the appraisal will come in lower than what buyers offered. Seems like most houses right now are selling at least 10k above asking price so how should I navigate this?

If you're looking ease appraisal concerns, put down more money. If you have 30% down, those suddenly go away because even with a low appraisal, you're still in an acceptable LTV range.

If you're financing, you're not really that flexible in terms of closing date. Sure you can push the closing date out but you can't really make it happen much quicker...there is a minimum number of days that it takes to process a loan and you're probably competing with cash offers who can close extremely quick. So what else can you offer to offset that?

A few of things you could do to make an offer more attractive:
- Be the highest bidder
- Put more cash down
- Higher escrow
- Minimal contingencies

ClassicAg18 said:

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Does anyone have any advice on how to put down an attractive offer that will get accepted in this ridiculously hot market? Looking at homes 200-265K, I am preapproved for a loan from two lenders already, and am very flexible on when to close.

I've noticed with loan offers on homes, sellers are worried that the appraisal will come in lower than what buyers offered. Seems like most houses right now are selling at least 10k above asking price so how should I navigate this?

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You are in a tough price range as this is probably the most sought after. The appraisal issue is a big problem. I am an appraiser - and a seller. I am selling my house in College Station and the most appealing offer to me is the one where I don't have to worry about it appraising. Due to low supply/high demand and low rates, prices are rising faster than the data the appraisers have to work with, hence the real and likely possibility it will not appraise.

I am a broker also and listed my brother's house in Plano. We got six offers most of which were above asking. Full disclosure, he is an appraiser also. He accepted the second highest offer, as this was the one where the buyer was making a higher down payment and was willing to waive the appraisal.

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I am a broker also and listed my brother's house in Plano. We got six offers most of which were above asking. Full disclosure, he is an appraiser also. He accepted the second highest offer, as this was the one where the buyer was making a higher down payment and was willing to waive the appraisal.

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Hey Shooter this is some great insight.

I'm helping my in-laws sell their house in Fort Worth which was just listed yesterday at $250k. They already bought a place in Round Rock near us and down here it was common to see the appraisal waived (which they did).

It seems the market is not quite as crazy in DFW, but are you seeing more buyers willing to waive the appraisal or is that a reasonable 'counter' if all other terms in the offer are good?

I agree that the financing and appraisal is probably my biggest concern.

Pay cash: https://buy-before-you-sell.hurstlending.com/

Question, if I put more cash down how will the sellers even know? Whenever they see the offers dont they just see it's a finance offer? Or do you mean up my offer price?

This might be a Minnesota thing but when I've written offer to buy a house here, it includes price and financing intentions but calls out the amount of money I intend to put down...as a point of attraction.

Sooner Born said:

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This might be a Minnesota thing but when I've written offer to buy a house here, it includes price and financing intentions but calls out the amount of money I intend to put down...as a point of attraction.

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This is correct. I put an offer last week and we put down 75% of the listing price (not the offer price) on the offer as the amount to be financed. But since the offer was way over asking, the amount down written on the offer was more than the 25% of the listing price (closer to 30-35%), if that makes sense. That way it was clear that at a minimum I'd be able to pay the difference in case the appraisal didn't meet the sales price. Of course, if the offer was accepted it could be adjusted later to max out financing that is more than what is on the offer. The details of this component to the offer was filled in by my lender, to give some validation to my offer. The buyer just wants to know that you can cover the sales price either direction and not have any issues with the loan. Which is why cash offers often win (stupid Californians...).

Of course, I didn't get it. Stupid Californians moving into boise and buying everything up. And yes, I am one of them too. But ****, it's hard to compete against other Californians who just throw money around like it's nothing. I feel bad for local idahoans, there's no way they will ever be able to buy a house in this state ever again...

"Waive the appraisal "

What does this mean? Isn't it required by the lender?

it means you will make up the difference in cash no matter what the appraisal says

(my best guess)

Pain is correct, Appraisel waiver you pay the contracted price regardless of appraisal value. Lender take the lower of the price and appraisal for the basis of the loan. So value comes in low you can't walk and agree to pay the difference. Can be painful

Hey guys, thanks for your "waive the appraisal" responses.

ItsA&InotA&M said:

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"Waive the appraisal "

What does this mean? Isn't it required by the lender?

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The responses above are right, but the appraisal is actually not always required by the lender.

Just went through this with my in-laws as they "waived the appraisal" which meant they were willing to come up with the cash if necessary to cover the difference between that and contract price. The lender actually asked if they even wanted an appraisal and said they didn't need it for the purpose of the loan.

So, we saved some money and hassle by declining to do the appraisal at all, and the lender didn't seem to care either way as there was already a significant amount down on the home and it's in a hot area.

Yes there is a waiver program. BUT...only Fannie/Freddie software program can grant it. It's an algorithm that looks at price, down payment, credit etc.

I would not count on a waiver for a purchase. Much more common in refis.

I'm a realtor in the SA area.....this is smaller potatoes but to be more competitive you can:

- ask for shorter option period (5 or 7 vs 10 days)
- offer more option money. I had a buyer offer us $500 for a 7 day option on a home that lasted less than a day on the market.
- don't ask for seller to pay the home warranty, survey or title insurance
- offer over ask and use the conventional appraisal termination addendum to show you'll cover the difference if home apprises lower than contract price.
- offer a seller lease back if seller needs to stay in the home past close

As you are aware, that price point is super competitive. An example on our market strength over the last year:

I had a seller apprise this week at $265K after buying the home in March 2020 at $239K. She did no upgrades since buying and is leaving on short notice military orders. Home went up 10.8% in less than a year.

Does that work?

It does work, in most cases. of course you cannot control is some one wants to pay 20% over market value. But, it will compete or beat with any reasonable offer.

You do not have a contingency to sell your current house first, there is no financing contingency as we give you a proof of funds letter and of course you can close quicker because there is no financing contingency as we are the lender and underwriter.

Once we give you the proof of funds letter you are done with underwriting besides the house related items like appraisal, title and insurance. So, we can move very quickly. So, those three things are all major pluses for sellers and should beat out another offer with the same or maybe even slightly higher net to the seller.

Great. I'll have to recommend you to my son.

Shooter McGavin said:

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ClassicAg18 said:

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Does anyone have any advice on how to put down an attractive offer that will get accepted in this ridiculously hot market? Looking at homes 200-265K, I am preapproved for a loan from two lenders already, and am very flexible on when to close.

I've noticed with loan offers on homes, sellers are worried that the appraisal will come in lower than what buyers offered. Seems like most houses right now are selling at least 10k above asking price so how should I navigate this?

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You are in a tough price range as this is probably the most sought after. The appraisal issue is a big problem. I am an appraiser - and a seller. I am selling my house in College Station and the most appealing offer to me is the one where I don't have to worry about it appraising. Due to low supply/high demand and low rates, prices are rising faster than the data the appraisers have to work with, hence the real and likely possibility it will not appraise.

I am a broker also and listed my brother's house in Plano. We got six offers most of which were above asking. Full disclosure, he is an appraiser also. He accepted the second highest offer, as this was the one where the buyer was making a higher down payment and was willing to waive the appraisal.

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How much above listing were your offers in Plano? We're about to list ours so I'm curious what to expect

Rice and Fries said:

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Shooter McGavin said:

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ClassicAg18 said:

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Does anyone have any advice on how to put down an attractive offer that will get accepted in this ridiculously hot market? Looking at homes 200-265K, I am preapproved for a loan from two lenders already, and am very flexible on when to close.

I've noticed with loan offers on homes, sellers are worried that the appraisal will come in lower than what buyers offered. Seems like most houses right now are selling at least 10k above asking price so how should I navigate this?

---

You are in a tough price range as this is probably the most sought after. The appraisal issue is a big problem. I am an appraiser - and a seller. I am selling my house in College Station and the most appealing offer to me is the one where I don't have to worry about it appraising. Due to low supply/high demand and low rates, prices are rising faster than the data the appraisers have to work with, hence the real and likely possibility it will not appraise.

I am a broker also and listed my brother's house in Plano. We got six offers most of which were above asking. Full disclosure, he is an appraiser also. He accepted the second highest offer, as this was the one where the buyer was making a higher down payment and was willing to waive the appraisal.

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How much above listing were your offers in Plano? We're about to list ours so I'm curious what to expect

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$20k over on a $590k house

For anyone who checks out this thread for advice, just to let you all know I ended up going with a new build property instead of an already lived in home.

If you're a first time home buyer, I HIGHLY recommend doing a new build right now. You will nine times out of ten overpay for an already lived in home right now. After searching for a little over a month and losing on two very competitive offers, I found buying a new build has way less competition (so long as you are able to reserve a house in the neighborhood you want before all inventory is gone), you get to personalize the house the way you want it to be, and there's no prior issues with the home such as bursted pipes. Only thing I recommend is to be mindful that it will take time to build the home. Right now a lot of new builds are already reserved/under contract and some builders aren't starting construction on the homes till June/July which means you won't move in till the end of the year but it can be worth the wait.

Don't feel discouraged (easier said than done, I felt discouraged A LOT) for those out searching right now, you WILL find something and it will suit your needs as well. Don't settle either as I did not and I'm getting everything on my wishlist in my new home and you will eventually too.

ClassicAg18 said:

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For anyone who checks out this thread for advice, just to let you all know I ended up going with a new build property instead of an already lived in home.

If you're a first time home buyer, I HIGHLY recommend doing a new build right now. You will nine times out of ten overpay for an already lived in home right now. After searching for a little over a month and losing on two very competitive offers, I found buying a new build has way less competition (so long as you are able to reserve a house in the neighborhood you want before all inventory is gone), you get to personalize the house the way you want it to be, and there's no prior issues with the home such as bursted pipes. Only thing I recommend is to be mindful that it will take time to build the home. Right now a lot of new builds are already reserved/under contract and some builders aren't starting construction on the homes till June/July which means you won't move in till the end of the year but it can be worth the wait.

Don't feel discouraged (easier said than done, I felt discouraged A LOT) for those out searching right now, you WILL find something and it will suit your needs as well. Don't settle either as I did not and I'm getting everything on my wishlist in my new home and you will eventually too.

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This is exactly what we did. No room to compete even at the 500K range in Dallas where we have 20% cash to put down, but would likely lose the offer. Then you're also exposed to taking a house you're ok with but potentially has things you don't like, such as floor plan, layout, etc UST because it's all you can snag.

Rice and Fries said:

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ClassicAg18 said:

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For anyone who checks out this thread for advice, just to let you all know I ended up going with a new build property instead of an already lived in home.

If you're a first time home buyer, I HIGHLY recommend doing a new build right now. You will nine times out of ten overpay for an already lived in home right now. After searching for a little over a month and losing on two very competitive offers, I found buying a new build has way less competition (so long as you are able to reserve a house in the neighborhood you want before all inventory is gone), you get to personalize the house the way you want it to be, and there's no prior issues with the home such as bursted pipes. Only thing I recommend is to be mindful that it will take time to build the home. Right now a lot of new builds are already reserved/under contract and some builders aren't starting construction on the homes till June/July which means you won't move in till the end of the year but it can be worth the wait.

Don't feel discouraged (easier said than done, I felt discouraged A LOT) for those out searching right now, you WILL find something and it will suit your needs as well. Don't settle either as I did not and I'm getting everything on my wishlist in my new home and you will eventually too.

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This is exactly what we did. No room to compete even at the 500K range in Dallas where we have 20% cash to put down, but would likely lose the offer. Then you're also exposed to taking a house you're ok with but potentially has things you don't like, such as floor plan, layout, etc UST because it's all you can snag.

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This is exactly how I felt about going with a new build and am glad it worked out for y'all!

And for those saying you may overpay on a new build, I do agree with you because material costs are high, but for the area I bought in houses at the same square footage and similar neighborhood as mine are being put on the market for at least 10-15k more than what I'm paying for my new build and on top of that people are putting in another 10-15k over asking price. So for me it ended up being more worth it but I know for other areas it might not be so much

I'm about to put an offer in on my 3rd home that has 15+ tours and 10+ offers on the first day on the market.

Wish me luck - this **** is stupid. $400-450k price range in San Antonio. Lost the first two (even went $25k above ask on a home listed at $450) without making the "final three".

Not sure what we need to do to win one. I'm waiving my buyer commission (co-worker is being my agent) but not communicating that well, which I think is why we keep missing out.

I'm going to try to 2x my options $$ and shorten the option period to 5-days. Wish me luck!

Best of luck!

I only went $2,500 over ask but did 2% EM, $500 Option Fee, and a 7-day option period.

Hope that will cut it!

Rice and Fries said:

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Getting ready to list next week in Plano - our realtor told us she's been getting a lot of offers on homes (usually over 30) and most have been trading between 6-10% over listing. Their last one listed at $305K and went for $350K with 57 offers.

This has to be insane right?

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Hopefully the people who bought that house for 350K are able to make up the value of it for however long they live there. That's nuts!!!

Serious FOMO right there

We close on one next week in Rockwall and actually completely waived our option period and appraisal addendum. Of course this is risky, but if you have a little extra cash on hand the appraisal can be waived. Your realtor just needs to research the comps and feel comfortable.

We offered $305k on a house listed for $315k. But both our realtor and the sellers' knew it was listed too high, so they only had one other offer (which was a cash offer).

Ours ended up appraising for $293k, which we were happy with and will only have to pay $12k in cash over to cover that. Our realtor projected the appraisal being anywhere from $280k-300k, so we weren't totally sure but are happy to be on the high end of that.

We are selling our home in Colorado. We had our number in mind but had to finish a few repairs first. Took two months and during that time prices went up a bunch... so we raised our number and listed for 35k higher than we originally thought we would.

The day it was listed we got 3 offers, one for list price, one for 15k over and the last for 40k over. First guy offered nothing special, second guy guaranteed the appraisal and sent copies of his cash accounts, and third guy refused to guarantee the appraisal. We took the second offer because of the guarantee and financials.

So lesson here... and how it applies to you, is to guarantee everything. You need to not just have a good offer, you also need to show your cash situation and guarantee your offer won't fall through.