[quote=AN][quote=Effective Demand]
Edit2: I would also like to note that another important takeaway is for buyers to realize that even if they hear that a higher offer is in it doesn’t mean its a better offer than what you put in. Trying to compete against unrealistic offers that have no chance of closing is a sure way to overpay.[/quote]
With this statement, you’re assuming that all highest offers are one that have no chance of closing? How do you know what’s unrealistic and what’s reality? Besides getting outbid and it did close above your offer.
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I’m not assuming that higher offers have no chance of closing I am saying bidders simply don’t know that the contents of a higher offer so they can’t assume its a better offer than the one they made.
There is a risk/reward component in offers for banks. Cash offers are lower risk, therefore lower reward. FHA can be higher risk (the risk of not closing and the market passing you by) but they may net more. With any financed offer you get appraisal risk, inspection risk, risk of borrower being able to close, etc. So without knowing how “risky” one offer is you can’t evaluate if it is truely a competing bid. Just something to watch out for.
Yes there multiple offers on many properties. But the number of offers that the seller realistically considers based solely on the financing type, inspection contingencies, concessions, and earnest money is a much smaller.
