caedmyn Posted September 16, 2019 Share Posted September 16, 2019 We put our old house on the market last month and had a full-price offer (with us paying their closing costs) within hours. We'd listed the house about 10% above what the realtor thought the market value was. The appraisal came back on Friday at the market value, and obviously the sellers are not willing to pay above that for the house. We're strongly considering counter-offering, agreeing to the price they want but without paying their closing costs. There's a good chance we'll lose these buyers if we do that, because they're using an FHA loan, which I guess is generally used when buyers don't have the cash for a down payment, which means they probably don't have the money for closing costs either. Obviously it's not possible to know exactly what will happen if these buyers walk away, but it seems like we're in a good position to find another buyer quickly. We're in a seller's market. Houses in our neighborhood have sold very quickly the last year or so. Our house is one of the larger houses in the neighborhood (not significantly larger, but a bit larger with an extra bedroom) on one of the largest lots, with a very large, heated garage. It's also got lots of new--newer roof, new paint inside and out, and all non-carpeted areas have brand new flooring. We don't have a payment on the house but the proceeds will pay down a good chunk of the loan on our current house and allow us to drop the PMI so it does benefit us financially to sell it...but so would an extra 6K that we'd lose in closing costs. Is it better to go with the sure thing, or take a (probably fairly small) chance with finding a new buyer? Quote Link to comment Share on other sites More sharing options...
Wildcat Posted September 16, 2019 Share Posted September 16, 2019 Something similar happened to us several years ago, but it was a VA loan. The buyers supposedly had not one penny to put towards closing costs so we agreed to pay $X in closing. Well, the appraisal came in under the agreed-upon price, which I was told is normal for VA loans. Maybe this is the case for the FHA loans, too? We had priced right at market for a quick sale, so I was pretty ticked. Anyway.... Since the house had gone under contract within hours, we countered with the lower price and them picking up the closing costs. We were looking at a 'swing' of not a whole lot, but felt that difference would 'buy' us many months of expenses if they backed out and we had to find another buyer. Lo and behold, they came up with some cash. It wasn't the full amount, but it was an amount that made it worth it to us to sign the papers and be done. The whole experience soured me on VA loans for other reasons that I don't want to go into here. I'm really hoping that when we sell our current house, it's to a buyer with conventional financing..... So, to (sort of) answer your question, I'd look at the dollar value of a potential loss of this buyer and having to wait and if you think everything else about the closing will go ok. (like are they pre-approved and the loan is a sure thing?) The 'value' I would place on having a seller in hand and 'ready to go' might just be worth a few thousand $ to get it all over with. On the other hand, if you need the money or if the $ involved here is "a good chunk", then I might be inclined to counter and just be prepared to have to relist the house. Generally, 'they' say that the first offer is your best one. That might be true, but it's the nitty-gritty details that determine whether it was a good deal or a bad one. You're in a seller's market, so without knowing the amount of money involved, I'd probably counter and take my chances. Quote Link to comment Share on other sites More sharing options...
Loowit Posted September 16, 2019 Share Posted September 16, 2019 It would depend on several factors. If I was really wanting to sell right away and could afford to sell for the price it would go for, then I would do it. If I could afford to wait it out for a better offer that is likely to come then I would do that. When we sold last summer we got two offers within the first couple days. We actually ended up taking the one that where got a bit less money because it seemed like a more stable financial situation and less likely to fall through if things came up with the inspection, which they did. Selling FHA and VA makes things more difficult because there are a lot of regulations and more hoops to jump through it seems. I have heard, though I am not sure how true or if it is area dependent, that if you house goes pending and then goes back on the market soon after that it is a red flag to buyers. Quote Link to comment Share on other sites More sharing options...
prairiewindmomma Posted September 16, 2019 Share Posted September 16, 2019 I would look at the current market stats for your area. In your price point and neighborhood, how many have gone under contract in the last 30 days? What is the statistical curve for sales? You are coming into holiday season, and the market is typically dead mid-November to early February (even in hot markets--people just don't look as much over the holidays). If you think you can get under contract again by mid-November and you can afford to carry the house to February if need be---I'd go back on the market. No one is going to want to pay over market rate. Loans won't cover anything over the appraisal amount. Your new price will need to reflect that, and it's not uncommon for buyers to ask for closing---so I think it's also a completely legitimate option to just drop the price, pay the closing fees, and move on. Quote Link to comment Share on other sites More sharing options...
barnwife Posted September 16, 2019 Share Posted September 16, 2019 The sellers were willing to pay above market because that's what they offered, now FHA isn't willing to loan them the amount they offered, that's their problem not yours. You're not talking about holding to your price, you're giving them something with your counter, that's fine if you feel like it. But don't think it's a sure thing even if you drop to the appraisal and still pay closing costs. Has the inspection been done already? They think they can get into a house with FHA qualifications (0-10% down?) in a buyers market? that's a pretty ambitious of them, but it's not your problem if they aren't qualified to buy your house. 2 Quote Link to comment Share on other sites More sharing options...
vonfirmath Posted September 17, 2019 Share Posted September 17, 2019 18 hours ago, Wildcat said: Something similar happened to us several years ago, but it was a VA loan. The buyers supposedly had not one penny to put towards closing costs so we agreed to pay $X in closing. Well, the appraisal came in under the agreed-upon price, which I was told is normal for VA loans. Maybe this is the case for the FHA loans, too? We had priced right at market for a quick sale, so I was pretty ticked. Anyway.... Since the house had gone under contract within hours, we countered with the lower price and them picking up the closing costs. We were looking at a 'swing' of not a whole lot, but felt that difference would 'buy' us many months of expenses if they backed out and we had to find another buyer. Lo and behold, they came up with some cash. It wasn't the full amount, but it was an amount that made it worth it to us to sign the papers and be done. The whole experience soured me on VA loans for other reasons that I don't want to go into here. I'm really hoping that when we sell our current house, it's to a buyer with conventional financing..... So, to (sort of) answer your question, I'd look at the dollar value of a potential loss of this buyer and having to wait and if you think everything else about the closing will go ok. (like are they pre-approved and the loan is a sure thing?) The 'value' I would place on having a seller in hand and 'ready to go' might just be worth a few thousand $ to get it all over with. On the other hand, if you need the money or if the $ involved here is "a good chunk", then I might be inclined to counter and just be prepared to have to relist the house. Generally, 'they' say that the first offer is your best one. That might be true, but it's the nitty-gritty details that determine whether it was a good deal or a bad one. You're in a seller's market, so without knowing the amount of money involved, I'd probably counter and take my chances. The first offer my parents got on their house was a VA loan. They counteroffered. The VA loan person took a LONG time to decide to counter. In the meantime, though, they had gotten a cash offer. Even though it was slightly lower, due to the hassle of the VA loan, they refused the VA loan counter and accepted the cash and were out of the house in less than 2 weeks. 1 Quote Link to comment Share on other sites More sharing options...
Wildcat Posted September 17, 2019 Share Posted September 17, 2019 Yeah, I don't know of our realtor was just blowing smoke, or what, but she said that she hated dealing with VA loans. I am very nervous for when we sell this house. An awful lot of people who buy in this area use VA loans. Like a whole lot. I'd take a lower offer if it meant not having to deal with them again, just like your parents did. I'm THAT soured on my experience with them, and it was *well* over a decade ago. 1 Quote Link to comment Share on other sites More sharing options...
DawnM Posted September 17, 2019 Share Posted September 17, 2019 Hate, hate, hate dealing with house sales. Hugs. I personally would be inclined to offer the lower price, split the closing with them, and be done with it. Quote Link to comment Share on other sites More sharing options...
rebcoola Posted September 17, 2019 Share Posted September 17, 2019 The issue with VA loans is really only the appraisals are much stricter. If you have an unusual house it’s rough to find comps they will take. Nothing else should be harder for the seller. Quote Link to comment Share on other sites More sharing options...
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