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Friday, May 08, 2015

Real Estate Tips: Multiple Offers, Appraisals and Financing.

As the temperature rises and summer approaches, the Brevard County, Florida housing market is warming up as well. With decreasing inventory, more buyers entering the market and continued low interest rates, multiple offer situations have become more common.

But who really wins in multiple offer situations where buyers are submitting competing offers (bids)?

With multiple offers buyers must guard against getting into an emotional bidding war.  The win at all cost mentality may be okay in Monopoly where the money is pretend but not when buying a house.

On the surface it seems there will be two winners.   First, the obvious winner is likely the seller.  The other winner is the buyer - maybe

But if offers are contingent on financing then the winner may not be decided until later....after the appraisal has been done.

But if the buyers are paying cash then the buyer and seller are guaranteed winners, right?  Maybe.

Most astute buyers will include an appraisal contingency with cash offers as well.  Even though there is no mortgage the buyer wants the property to be worth the selling price.  Thus, the appraisal.

A word or two about appraisals... Real estate appraisers independent.  They have no "horse in the race."  Appraisers use established techniques to determine the value of real property.  It is this value lenders use to make loan decisions.  

So back to the title question....Who wins in multiple offer situations?   Maybe the seller, maybe the buyer, maybe both, maybe no one.

Every transaction is different.  Sellers should always remember, "Under contract is not sold!"

Read more about appraisals and offers in this related reading.

Is an appraisal contingency necessary with a cash offer?
What if the appraisal comes in low?
When is the highest offer not the best offer?
Terms define the real price?

Ready to buy a home in Viera, Florida?  Call me at 321-693-3850 if I can help.

Have a question, send me an email.

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