Even five years ago, my role as your realtor was essentially to market your home in order to obtain the highest price OR most favorable terms available to a potential seller. In contrast, my role as a buyer’s agent was to obtain the lowest possible price and/or the most favorable terms for the buyers as well as concessions that would allow them to obtain the most
favorable financing.
Oh how things have changed. In today’s market, I routinely find myself explaining to the sellers that even though the financed offer nets them more money, they may be better off taking a lower cash offer because it eliminates any appraisal or financing worries. The second most common conversation is generally explaining why we are going to be two weeks late on a closing because something ridiculous such as a new requirement to get W-2s direct from the IRS or they can’t track the funds from the buyers grandmother or parent is holding up the closing. Most of these issues defy common sense and therefore take a lot of skill and patience to explain to the average seller.
With a buyer it is even more difficult to explain. Yes I know that Mr. Buyer has written more than 60 contracts over the past 6 months and still does not have a property in escrow due to the extreme shortage of homes. Furthermore, try explaining to a buyer who you just met for the first time that they will have to bid slightly over if they are a cash buyer and significantly over the list price if they are a finance offer . . . . . just to have a chance and if it does not appraise probably have to pay the difference in cash to be able to keep the hard fought offer they won. Even the fact that it did not appraise is difficult to explain when they have looked at 100 homes and this is the best one for the lowest price and still it did not appraise. They also commonly have to put up non-refundable earnest money at the conclusion of the inspection period so it is very important that financing be in place and very solid. Now compound that, with different rules for each kind of property such as a HUD home already has an FHA appraisal on it so any bid over list price requires the difference to be paid in cash or on numerous REO (repos) properties investors can’t bid for the first 10 or 15 or 30 days. And for the final twist, if you buy a Homepath home and use Homepath financing, it doesn’t have to appraise at all. How can this all be true? But it is.