Mike and Maria Patakas at The Agency Palm Springs, Desert Cities

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Highest and Best Offer Tips for Your Home Purchase- Mortgage Financed

Highest and Best Offer Tips for Your Home Purchase- Mortgage Financed

Our real estate market in the Palm Springs area has seen a lot more buyers  in play, especially the last 6-8 months, and we have represented numerous buyers that were requested to make a highest and best offer to obtain seller acceptance. With so many properties priced at levels 40-60% or more less than they were 5-8 years ago, it has enabled much more affordability for people to get their dream desert home. Most offer are financed with mortgages, although cash buyers have accounted for a sizable percentage of home sales in 2011.

Here are some highest and best offer tips to keep in mind when using mortgage financing:

* Request your agent to see if the other competing offers are all mortgage financed, or if any are cash financed. Even if  competing against cash buyers, it doesn't mean you can't get an accepted offer of course; you just want to know a little about your competition. If your agent can get anymore information regarding competing buyers, even better.

* If you have room to go up in price to get the home you want, but weren't expecting to have to, keep in mind that your monthly payment and down payment may not rise too much with increasing your offer price. We have seen more than a few buyers barely lose out on obtaining an accepted offer by as little as $1000, and that maybe changed their proposed monthly mortgage payment $3- $5. Now those buyers have to find a new home, and it may have not been as good of a home as the one they lost out on, and maybe even more expensive. Get monthly payment and down payment scenarios from your loan officer so you know your options- every dollar counts in tight highest and best offer situations.

* Some agents dissuade requesting closing costs in a highest and best offer situation, as they try to make an offer as "clean" as possible and give the impression they are a 'hassle-free buyer' that is serious about obtaining the home. In most cases, all the seller cares about is what they can net when comparing mortgage financed offers. Now size of downpayment, deposit, seller concessions, etc. do come into play, but it is hard to leave more money on the table for a seller if substantial enough. If you need to increase an offer to secure an acceptance, and are competing against other buyers, even if cash, you still can ask for closing cost credit and keep as much of your money in your bank account and not spent on closing costs. Just keep in mind that the price you offer will have to make it difficult for other mortgage-financed offers to compete against you and far enough above if you are indeed competing against cash financed buyers. If it's a home that stands out against the other available homes like it, then it may have sell at or even well above listing price- this has been happening regularly in certain price ranges in our market out here recently. In some cases, you may have to go $5-$10K (or more) over list price if requesting closing cost credit to exceed other competing offers 'net' amount to the seller- make sure to discuss with your agent. 

* Remember a property's true worth in a highest and best offer situation is what someone will pay for it, and it may result in bringing up the values of surrounding properties around it. Keep in mind multiple buyers get frustrated when they losing out on a home, and next time a comparable listing comes on market there will be more anxious, impatient buyers to compete against and it could raise prices.

* The list price is not necessarily an accurate dividing line for what your maximum should be- be flexible and informed. It may sell less or more than list price. Too often we see listing price define if a buyer got a 'deal' or not, and sometimes after weighing out all related factors, it isn't the case.

 

Please visit us at www.mikeandmariahomes.com, and contact us with any questions regarding this blog or about desert real estate. Thank You! 

 m&m realty team

 

Highest and Best Offer Tips for Your Home Purchase- Mortgage Financed

 

 

THEAGENCY

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Mike Patakas | Maria Patakas

760.808.5400 | 760.464.4650 

BRE #s: 01264926 | 01785498

 

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Comment balloon 2 commentsMike & Maria Patakas • December 30 2011 05:30PM
Highest and Best Offer Tips for Your Home Purchase- Mortgage Financed
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