Main Line Homes Blog

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What are they offering?

Some thoughts on selling houses in this very odd market right now.

Our local Tredyffrin Easttown and Main Line real estate market is suffering from low inventory, like many other areas across the country. It is so bad in some townships that finding any comps for listings is well nigh impossible. However, there are large numbers of buyers waiting for homes to be listed and sellers are inundated with offers in a matter of hours. 

But those offers may not be all they seem?

What are they offering? Fair market value or any price, but dependent on it appraising!

Fair market value is what buyer and seller are willing to transact the sale at, many buyers may offer a similar price, so that would be fair market value right, but hold on if it needs to appraise is that fair market value.

For an appraiser, he needs homes that have sold and settled, preferably within a certain distance and not more than 3 to 6 months before. A recent appraiser also wanted homes that were bigger and smaller, he could not just use bigger homes and make an adjustment.

But, didn't your offer get accepted because it was the one which would pay the highest price using an escalation clause and now you want the seller to reduce the price because the appraiser cannot find any comps. Would you offer the seller more if it came in above?

How did you and all those other buyers chose the price offered? Surely you considered recent sales, other homes you have seen, before you made this wonderful fair market value offer to the seller. On what grounds therefore are you asking the seller to reduce the price you agreed to pay?

If the bank won't give you a mortgage for the whole amount, it may require you to put more money down in this market to cover the difference. The financial condition of the buyer has never been more important. Why do you expect the seller to cover the difference?

Even when listing a home using recent sales can cause a home to receive multiple offers significantly over the asking price. It is therefore becoming more important for a buyer to waive the appraisal, more so than inspections, or at least be willing to not be dependent on the appraisal coming in at value to go to settlement.

 

If you are buying or selling on or around Tredyffrin Easttown or along the Main Line we can help you,  contact us or connect

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Comments

Nick & Trudy Vandekar, 610-203-4543 - Those are all great questions. TX has grabbled with the same issues. We now new Amendments which can be used on appraisal issues but can't be used on VA, FHA, or USDA loans.

This is excellent information for buyers and sellers in your area! 

Posted by Patricia Feager, Selling Homes Changing Lives (DFW FINE PROPERTIES) 2 months ago

Good advice but hard to make buyers understand the complicated issues presented with these competing offers!

Posted by Carolyn Roland-Historic Homes For Sale In Delaware and S. Chester County PA, Carolyn Roland, GRI, CRS (Patterson-Schwartz Real Estate) 2 months ago

Hello Nick and Trudy,  always interesting how one does it vs another.  Some still go with the contract.

 

Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) 2 months ago

Nick & Trudy Vandekar, 610-203-4543  It frustrates me when I receive agreements that have an appraisal contingency  addendum's  .  They want you to take the property off the market until an appraiser decides the property appraises for full value plus they want seller assist .

Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) 2 months ago

Good discussion!  I represent both buyers and sellers and this is what negotiation is all about.  I might ask the question if the potential buyers knew ahead that the home was only appraised at "X" amount, how much would they be willing to pay for that home? This is the question to ponder. 

Posted by Sheri Sperry - MCNE®, (928) 274-7355 ~ YOUR Solutions REALTOR® (Coldwell Banker Residential Brokerage) 2 months ago

Nick and Trudy,

What a wonderful discusssion you started.  I really enjoyed reading your post and the comments it generate from the community.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) 2 months ago

In my area 20% above list I'll get you nowhere

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) 2 months ago

Nick, you bring up a great point and one that is causing questions and hurdles in the current market. I find that waiving the appraisal contingency is the best way to compete in a multiple offer situation. I agree, when an escalation addendum is in play but, the buyer wants to retain the appraisal contingency it's something the seller needs to think long and hard about. 

Posted by Amanda S. Davidson, Alexandria Virginia Homes For Sale (Amanda Davidson Real Estate Group) about 2 months ago

Good morning again Nick. This is terrific post. When you are in a tough market you better be prepared to do what you need to to prevail.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) about 2 months ago

Timely! It's a discussion we frequently have both at listing appointments - and when we are preparing an offer with our buyers. It's something both parties need to really consider...

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORS® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) about 2 months ago

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