Which offers would you choose and why? I'm under contract now.

Question

Received multiple offers in a short period of time. Total of 11 but only 3 really stood out to me.

Built 2009. Single story home in TN. Mid 1700 sqft. Used comparables that were under contract and closing soon. Listed at $239,900/ $138sqft Interviewed 3 listing agents with comps. How all 3 were so different really amazed me. 1 came at $217k. 2nd came with $220k and changed to $242k later on. 3rd came with $235k. I chose to go with the 3rd agent.

1. All cash offer at listed price. No contingencies. No inspection. Looks like a real estate investor from PA.

2. Conventional at $248k with appraisal and home inspection. 40% down with $2500 earnest money. Coming from CA and no need for buyer to sell current home contingency.

3. VA loan. Current active duty coming from CO. Offered $255k with appraisal gap to $5500. They are paying all closing costs minus termite for which seller has to pay.

I've already chosen one and under contract. Let me know which one you would pick.

Sang Yi · Answer

Russell B. I didn't counter the cash buyer because I didn't believe they will go that high. They had a chance to put their best after multiple offers and no actions were taken.

Joe S. Yes, I decided to go with the VA offer. My thought process was little speculative but I believe I made the right choice.

When initially determining the list price off comparables that haven't closed but under contract to close. I was thinking $235k but went with $239,900. This is military town so I had a lot of VA and FHA offers. The buyers agent said this buyer lost out on 7 bids already. I'm guessing he's determine and willing. He has a letter attached with his pets and how they will enjoy the spacious backyard, etc...Also, mentioning upstairs bonus room to use as man cave but I'm single story with no upstairs...copy & paste job. Ok..get it. They were paying for all closing and no fixing any minor stuff. My problem was is this going to be appraised at $255k. If the appraisal came in at $230k plus $5500 gap..im in trouble. VA appraisal was done last week and I had to beg our agent to be here to meet the appraiser with 3 comps we used. Long story short. Appraisal came in at contract price so I'm happy. Surprised but happy regardless. I was expecting lower and adding the gap to be somewhere in the 240k-245k range. Good comparables really helped. The VA appraiser that day was complaining to us about how agents are mad the appraisal didn't come out right. Agents only keep talking about how many offers above the prices that they received. Home inspection came out food except a wood rot on the bottom of deck staircase for which they waived and signed both parties.

I bought this home 1 year ago using VA no down. No funding fee. No pm I. I had the seller five us 7k for closing cost and spent 500 appraisal, 250 for inspection and $19.90 at closing escrow. I even thought about using this as a rental in a different forum but quickly realised it was better to sell. Make 35-40k net.

Sang Yi · Answer

FYI for real estate agents out there.

1st agent came up with $217k using comparables that closed recently. He asked for 1 day so he can search and come up with a good number. After I notified him later that I'm using somebody else, he asked nicely what the difference was to help him see where or how he lost my listing. I informed him that with the current market situation and fast changing prices.. I went with higher price of $235k which ultimately went to list $239,900. He said that $235k is me going to the La La Land.

I believe you don't want to make big promises of going too high but seeing the market for what it is and pricing it accordingly will land a win rather than losing to another agent.

Benjamin Aaker · Answer

How do you think the inspection will go? If the place is immaculate, then you could consider going with 2 or 3. Thing is, inspectors will always find something, giving the buyer a way to back out, or decreasing your sale price. You got an asking price offer, cash, no inspection? That's my pick. Think of your holding cost for the next 60 days waiting to close as well as closing costs, uncertainty around the appraisal. #1 for me.

Russell Brazil · Answer

Id counter the cash offer at $255k.

Joe Splitrock · Answer

@Sang Yi I would have picked offer #3 because the price gap was so large. You are getting $7K more than the next closest offer. Cash is king, but not worth taking $16K less. It appears offer 1 and 2 are out of state investors, versus the VA loan means they are living there. Bonus in this situation is helping an active duty member of our armed forces.

I don't see inspections being a concern, because the property is fairly new. If the building was 100 years old or in rough condition, I would go for the cash offer.

Sang Yi · Answer

No right or wrong answers here..im sure its very dependent on the seller(me) situations.

Scott M. We did ask for high/best when we had multiple offers. The offers I've listed was the final offers. The no.3 VA offer had home inspection for only safey/hazard big ticket items.

Theresa H. The list price was $239,900. 1st cash offer came in at asking. I used a close comparable that was still under pending but received info that it was going to close at $141/sq and it was slightly smaller. It has not closed at that time when we decides our list price.

Theresa Harris · Answer

Assuming the three in the text ($217, $242 and $235) are listing options and the other 3 are offers.  How much is the first offer for?  If it was comparable to the others, I'd go with that one.

Scott M. · Answer

Interesting question and I am sure you will get very strong votes for all three being the #1 way to go because everyone’s goal/objective and experience is different.

#1 Being cash and no contingencies is appealing for those reasons.  I would definitely ask for highest and best on this one before accepting any offer.  See how high they are welling to go.  If in fact they are an investor they have a profit motive and generally speaking will never be able to compete with a homeowner.

So, not saying that would be my choice, but that is what I would do.  Then make my choice after I have that final/best number

I imagine a lot of people will pick #2 as a lot don’t like VA loans….but the appraisal gap does make it interesting. They paying all FHA required repairs as well?