The recent market changes have brought new requests in offers that quite frankly have major impact on how sellers counter offers on their homes. It has become very common that buyers ask for cash to close in their offers. Not only are they making low offers, they also ask for up to a 6% seller contribution to prepaids and closing costs.
A few years ago, in a stronger market, we saw this and it was common to add the contribution on to the asking price in order to actually sell the home at a price the seller could live with. With the changes in the market, homes that are priced with the market are actually priced to sell and to appraise. Buyers are not paying attention to this. I have seen offers on perfect homes that are priced for their condition to sell. The offers come in and they are 7 or 8 thousand below asking price and then ask for another 4 thousand in closing costs. This does not make sense!
If a buyer can get a desparate enough seller maybe they will agree, however, that will have a big impact on every other home and it's value in that neighborhood. I think that lenders are suggesting this idea to buyers and buyers are then actually looking at homes that are more costly than they can afford. The consequence is that buyers are making many offers before they get one that sticks.........the consequence to their agent is that that agent is running in circles trying to make offers for these buyers. I do not have an opinion about right or wrong in this, but what I think is that this type of practice falsely impacts the market and it may not be a positive thing!
Think about this. If the buyer actually needs this closing cost money......he really doesn't have money........and what happens if he loses his job? Don't we know? I think it helps to continue the circle of foreclosure! What do you think? Email me at DAAHomes @gmail.com