Woodbridge Virginia Real Estate News About Homes For Sale And Homes Selling In Woodbridge
Woodbridge VA Home Shopper Loses Bid For $200,000 Home To $275,000 Cash Offer
Woodbridge Homes First Time Buyer Homes For Sale Sell Fast And For Prices Way Over List Price
Monday, October 19, 2009
George was referred to me by happy clients who worked with me to buy their first home.
George is single, with a substantial income, so he wants to make tax-deductible mortgage payments instead of rent payments and higher income taxes.
George has bid over the list prices of three homes so far, and lost-out to other bidders who offered more money than did George.
The inventory of typical first-time buyers homes, homes priced under $350,000, is way down, close to zero. George is battling other buyers each time a new listing hits the market under $250,000. 4-12 bidders for each home for sale under $350,000 is NORMAL.
The $8,000 first-time buyer tax credit sunset date is coming fast. George is heck-bent on buying a house before the tax credit expires.
A bank-owned, foreclosed, 3 bedroom, 3 bath ranch style home with a 2-car garage popped up for sale in Lake Ridge on Friday, priced well at $200,000.
The home was priced especially well when compared to similar homes that SOLD in the same area in the past 120 days.
One similar home list priced at $210,000 SOLD for $220,000; the other similar home list priced at $200,000, and SOLD for $215,000.
George set an appointment to write an offer at my office on Saturday.
I know the listing agent, Glen, the agent who has the house listed for sale on behalf of the bank. Glen and I are not pals nor buddies, we're colleagues who have cooperated on the sale of other homes over many years.
I called Glen to find out when the bank would review bids on the house; are there any bids on the table right now?
Glen is a straight-shooter who doesn't bluff or play games.
When I called Glen last Friday, October 16, the house had been listed in the MLS 9 hours, and no bids were on the table. The bank would review offers today, Monday, October 19 to choose the best offer.
Glen gave me the courtesy of a voice mail message later that night, to let me know that 2 solid, bona fide offers hit the table late Friday. 
The higher offer of the two was $275,000, ALL CASH, with no appraisal required.
I sent an email to George right away, knowing he always checks email the moment he rolls out of bed in the morning.
No need for us to meet to write an offer that day. George was knocked out of the running.
Why?
First, George is qualified to buy up to $250,000, with an FHA 3.5% down-payment loan, so he did not have the buying power to compete.
Second, pretend for a moment George offered more than $275,000. The deal would not fly.
Why?
Folks using bank financing to buy a home get the protection of an appraisal, so they don't buy an overpriced house. The bank financing the purchase does not want an overpriced piece of collateral.
George's bank appraiser would value the house for the bank loan according to the recent, comparable sales... somewhere $215,000 - $220,000.
Pretend for a moment that George won the bid with a $285,000 offer, but the house appraised for $220,000. Instantly, the sale process stops while George and the seller negotiate new terms; first, the bank could lower the sale price to the appraised value; second, if George had a big pile of cash, he could add a $65,000 down payment on top of the $220,000 loan; or third, if the parties cannot come to terms, the contract would become void, George would lose the deal, get his deposit back, and the bank would call the dude who offered $275,000 all-cash.
In reality, the bank selling the house already knows that the $275,000 all-cash offer, with no appraisal required is the offer to take. The bank knows that a buyer using bank financing couldn't come close to beating an all cash offer.
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