In some parts of the country right now, maybe your neighborhood, real estate markets are HOT! Homes are getting multiple offers as soon as they go on the market, many of them above list price with no contingencies and pre-approved financing. So if you are making an above list price offer on a house that just went on the market, we have a few things you should think about.

  • Make sure you are preapproved (and we can help with that). If the sellers are going to take your offer among the many they are likely to get, they want to make sure financing is NOT going to be an issue. So let us help you do that before you make ANY offers. We can usually get you set to go in about a day.
  • You’ll likely need to make an offer above list price. We are NOT realtors, so you’ll need to get a good one in your market to advise you on the best number to go in with. But you might not want to start with a home price that is at the top of your pre-approval range, in case you might need to increase that number in negotiations.
  • The appraisal will be important. There are 2 scenarios here that you need to be mindful of:
    1. Home appraises below your accepted offer – for example: you find a home listed for $300,000. You make an offer for $310,000. The offer is accepted. The appraisal is done and comes back at $300,000. You have 2 options – bring an additional $10,000 to closing, because your loan won’t cover the amount above the home value (and you may be bringing that and more with a down payment) OR you should have a contract contingency to walk away because the home did not appraise for the purchase price. Discuss these things with your realtor ahead of time so you know exactly what is the smartest thing for you and what the laws are in our area.
    2. Home appraises above your accepted offer – for example: you find a home listed for $300,000. You make an offer for $310,000. The offer is accepted. The appraisal is done and comes back at $325,000. You win! You now have an additional $15,000 of equity in your home the day you take possession.

Home buying is exciting and wonderful and yes, sometimes stressful. If it would help to just chat with somebody about the mortgage process, we’re here and we’re happy to help. And there will be zero pressure from us, guaranteed.

Happy home hunting!