You've listed your home on the market, with the intention and hope, of getting the highest possible, available price, in the shortest period of time, with a minimum of hassle. If you are using the services of a true, qualified, real estate professional, who has reviewed the comparable prices, other similar houses have sold for, and evaluating how your home compares, your listing prices should end up being no more than 10% higher or lower, than the final selling price. Many people, however, get thrilled by incredibly high offers from seemingly qualified buyers, but one should be careful, be accepting this, for a number of reasons.
1. Bank appraisal:
Let's say your listing price was $800,000, and you received a $900,000 offer. Sounds great, right! However, if the bank appraisal states the appraised value at $800,000, then mortgage calculations will be based on this number. For example, in a standard 20% down mortgage, the buyer would put down $160,000 and $640,000 would be mortgaged. However, if the prospective buyer wanted to get 80% of $900,000 and put down $180,000 (financing $720,000), this might create a stumbling block/ obstacle for the deal! What might occur. The buyer would need to put down the difference between $900,000 and the loan amount qualified for, of $640,000, or $260,000 down. While some buyers might have planned to put more down, and financed less, or done a cash deal, most might be challenged to come up with the higher downpayment.
2. Buyers' remorse:
When this lower appraisal comes in, will the buyer now, regret how high his offer in, and want to either get out of the deal, or renegotiate! Either way, it creates a challenge to a smooth transaction!
3. Buyer blames his agent:
How could you let me make such a bad deal? You should have known I was over - paying!
4. Seller blames his agent:
Why didn't you warn me, of the dangers of accepting such a high offer? You're supposed to be a professional, and know the market, and how could you put me in such a predicament?
As you can see, while occasionally, an offer far over the listing price, is a terrific thing, in many cases, it might not be so great! Discuss this topic, and every topic regarding the real estate transaction process, in advance, with your qualified, real estate professional!
Richard has owned businesses, been a COO, CEO, Director of
Development, a consultant, professionally run events, consulted to
thousands, conducted personal development seminars, for 4 decades, and
been a Licensed RE Salesperson, for a decade+. Rich has written three
books and thousands of articles.
Website: http://PortWashingtonRealEstateOffice.com and
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Website: http://PortWashingtonRealEstateOffice.com and
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