This is part 2 of my series of “How To Win a Home With Multiple Offers In Wilmington, NC.” If you missed part 1, click here.
While this strategy isn’t for all buyers, it does work to help you win a home with multiple offers. During the downtown of 2008 through 2012, investors would offer prices for bank-owned homes higher than their appraised value. When the appraisal came in, they’d see it didn’t appraise and ask the seller, in this case, the banks, for a price reduction.
The banks got hip to that very quickly. In their agreements, they inserted a clause that the buyer agreed to make up the difference in cash if the house appraised for less than the offering price. That put an end to that for investors.
Since then, offering more than the appraised value in cash became a strategy for buyers to get a leg up over the competition. It works like this:
Say you offer $350,000 for a house worth $340,000. If the appraisal comes in a $340,000, you’ll need to come up with an additional $10,000 IF you’re putting 20% or less down. If you’re putting down more than 20%, your lender may require you to come in with less than $10,000. This could vary lender to lender so before using this strategy, check with your mortgage broker.
I have seen it repeatedly where appraisers come in with nutso values. I’ve looked at the information six ways to Sunday and can’t find the value among the homes that have sold within a 1-mile radius. Somehow, though, the appraiser does, and you’re off to the races. It’s happened so many times as not to be uncommon.
However, it is too risky to depend on an appraiser finding a value that may not be there if the stars aren’t aligned. If you use this approach, you’ve got to have the extra $10,000 in cash if the appraisal comes in below your offered price, which can happen.
It isn’t easy to win a home with multiple offers anywhere and you need to have a strategy to get the job done. Offering the right price and terms is good, but an unconventional approach may be the best way to get the sellers’ attention.
This is the end of my two part series on “How to Win a Home with Multiple Offers in Wilmington, NC.” If you missed part 1, click here.
If you’re looking for a home in Wilmington, NC, please don’t hesitate to call me. I can help you find the right home for you. Please click here for my contact page.
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