This market is an absolute nightmare for people buying a house. Here in East
Tennessee, the fine folks from California, Illinois, and other places around the country
are rolling in and paying over asking with cash. I mean you can’t blame them for
wanting to come live in God’s country, but it’s putting the working-class locals at a
This blog may provide you with zero help, but I thought we might at least try to give you
some knowledge from the seller’s perspective. So you’ve found the house you love, but
you know some other yuppie is going to come in and bid too, you saw them in their
skinny jeans out in the yard, or you know somebody is going to call and offer on it
without seeing it because that’s been happening too. So here’s what the seller looks at.
Seller Net – This is clearly most important. This is how much the seller will be putting in
their bank account or investing into DogeCoin. This is how much money they’re getting
after all expenses. So when you offer 250,000, they still have to pay their realtors,
closing costs, etc. So obviously the more they net, the more us greedy creatures are
likely to accept. However, there are other factors. If you offer the same exact thing as
someone else, but the other offers cash while you offer a USDA loan, they’re going to
be taking the cash. So that leads us to financing.
Financing – We don’t have time to go over the ins and outs of every loan. Just know
that Cash and Conventional loans are king. Federal Housing Administration (FHA)
loans, Veteran Affairs (VA) loans, and United States Department of Agriculture (USDA)
loans fall behind that. The three behind the conventional typically have more guidelines
for underwriting which means more risk of something falling through, or the closing date
Contingencies – When you buy you’ll have your financing contingency, inspection
contingency, your appraisal contingency, and your I need nachos contingency. Waive all
those and you get the house! Don’t do that, but this is common amongst cash buyers. In
this crazy market, people who want to get a leg up may waive their inspection
contingency and accept it as is. Some may waive the appraisal contingency and make up
the difference. There are different strategies to take. I’d advise you to not waive any of those if
you’re a buyer using financing. But you’re an adult so you make your own decision.
Other things lower on the list are earnest money deposits and closing date.
Obviously, if you put down a fat earnest money deposit you’ll get someone’s attention.
The closing date can be a sneaky good way to get a leg up also. If you’re willing to
close the day they need then you’re already on the good side. If someone offers
$25,000 more than you and wants to close a week earlier than the seller is probably just
going to hire some movers and live in a van if they have to, but you never know.
So the most important things to think about when making your offer from the seller’s
vantage points are: Seller Net, Financing, and Contingencies.
Put yourself in their shoes. Make your offer. Pray, chant, and then hope the Californians
don’t send in that fat cash offer.