Where real estate is concerned, I often hear people say, "I don't want to get into a bidding war, so I'm going to sit this one out." The truth about DC is that we are a competitive city in nearly every way. So, there is no sense in giving up the fight when it comes to finding the right home. Rather, enlisting the appropriate strategy is key. And as they say in Lottery terms, "you can't win if you don't play."
This week, I presented a highly competitive offer that was not chosen by the seller. My buyers are perfectly financed and I presented an offer that allowed for plenty of leeway where their maximum price was concerned. When I asked for some feedback from the listing agent - as often I do in order to create some education for myself and my buyers - I was told our offer lost on two items:
1) Home Inspection; and
2) Appraisal Contingency.
We had written in a General Inspection, when buyers with the winning offer had providing no home inspection contingency whatsoever. They had chosen instead to pay a home inspector for a pre-inspection, which allowed the to determine whether or not they wanted to make an offer ...and because the inspection went well enough, the buyer put forth an offer without a Home Inspection Contingency.
My buyers' offer also included an Appraisal Contingency, which nearly always is included in the offer to purchase real estate, whereas the winning offer did not. The Appraisal Contingency allows buyers who finance that comfort of knowing their lending institution will underwrite the mortgage on their up up to the home's current fair market value.
In competitive situations, buyers are coming to the table with a bucket of cash just in case the appraisal comes up short of the contract price in order to bridge any gap between the appraised value and the contract price.
This is certainly something to chew on. But in the end, each buyer is the boss of making the decisions that make best sense for moving forward on a home or walking away from a potential deal.
The above are merely tools that some are using in order to accomplish their home buying goals.
If information is power, my mission is to help create the most powerful consumers of real estate on the market!