Marc Guzman's West County Blog

Hi John,

The property on 240 Fleming Ave is still on hold at the moment.  Email me about a private showing (marcshomes@yahoo.com)

Marc

Today’s market is very frustrating for many home buyers because there are multiple offers on many properties.  With FHA financing it becomes even tougher since many buyers are using the same type of financing, and since FHA has property condition requirements, the properties in good condition that qualify for FHA financing have even more offers.  Below is a link to a video I did on offer statistics on a few of my listings.

http://marcguzmanhomes.tumblr.com/post/21838711535/offer-stats-for-bay-area-real-estate-market

Here is my recommendation… do not be afraid to get aggressive when making an offer.  Aggressive FHA buyers are making offers from $25k-$100k over the asking price.  They are doing this because they know the in the end, their bank will only lend based on the Value as determined by the appraisal report.  Appraisers today are under a lot of pressure to not exaggerate values (due to market crash), thus tend to be conservative on their valuations.  Appraisers must also use the most recent and closest comparable sales.  

So review comparable sales with your Realtor to get an idea of what the property may be worth, then get aggressive with your offer.  An aggressive offer will catch any seller’s attention.  But keep in mind that if the appraisal comes in lower, the seller can still refuse to reduce the price and the decision would be up to you to close the deal or withdraw.  It may not always be wise for the seller on a FHA deal to not reduce the price because the FHA appraisal stays on file with the FHA for 90 days, but some seller’s do refuse to lower the price.

Here is a real world example:  I had a foreclosure listing in the City of American Canyon, CA and received 17 offers.  Highest offer was FHA and $115,000 over asking.  The seller, my client, was a bank and the asset manager accepted the FHA since it was the highest.  Appraisal report came back at $20,000 above the asking price.  Buyer requested a $95,000 price reduction and my bank-seller allowed it.  This FHA buyer now beat out offers that were cash and conventional financing and ended up buying the property for less than what the cash/conventional offers had offered.

Now will this same situation happen everytime?  No it will not.  But do not be afraid to get aggressive with your offer.

Marc Guzman