Agent

Crunching the numbers on competing purchase offers

Don't assume higher bid is better
Published on Oct 15, 2012

Sellers are inclined to go with the highest-priced offer when they receive more than one. But, price is only one factor to consider. An offer with a lower purchase price but a large down payment and a quicker close could be best. The terms of a purchase offer can make or break a deal, particularly given today's stringent mortgage qualification requirements. Buyers with large cash down payments usually have an easier time qualifying for a mortgage than do low-cash-down buyers. However, today even large-cash-down buyers need to qualify. Unlike in 2006, lenders now require verification of employment, a great credit record, and one or two acceptable property appraisals. A large cash down payment can salvage a transaction that might otherwise fall apart if the property appraises for less than the purchase price. If the lender is willing to loan the buyer up to 80 percent of the appraised value, and the buyer needs a loan for only 60 percent of the price, the deal will probably ...

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