Waiving Appraisals to Win

How to ‘Win’ in multiple offer scenarios?

This is an often discussed topic with my agent friends. All of us have been in the situation with our buyer clients where we are just one potential purchaser in a sea of offers…. the most I have competed with were 17, seriously!

Cash offers are ruining it for many of our ‘regular folks’ looking to purchase with a hefty downpayment and a mortgage.  Often it is impossible to compete with the cash buyers as they can close in a matter of days and they have no appraisals.

When we obtain a mortgage, the mortgage lender requires an appraisal on the property. If the property does not appraise for the purchase price, then the lender will not loan on it with the terms that were promised to the buyer.

Thus, appraisal matters for the seller.

Say my buyer, Simon, offers the moon on a house – a whopping $600,000 when similar properties have sold for tops $575,000 in the recent past.  He is taking out a mortgage. He wants to be as competitive as possible.

Simon has already waived his inspection, reviewed title and has no other contingencies in the offer. He in offering a hefty amount of earnest money.  Only thing looming over his head is a financing contingency and an appraisal. What can he do?

Simon can opt to not include a financing contingency and/or the appraisal portion of it.  If Simon does not include the financing contingency and his offer gets accepted (yay!) then he has no way out of the deal.  If for any reason Simon does not complete the purchase then his earnest money will be easily contestable by the Seller.

What if the home doesn’t appraise?  To stay in contract, Simon will have to bring the difference between the appraised price and the offer price in cash to closing.

The seller would now look at Simon’s offer almost as good as cash.  Simon could potentially beat out a cash offer that was lower and he would likely beat out other offers with mortgages including appraisals.  It’s a risk, but it works, has worked many times for my buyers who have a good risk tolerance.

Here’s the deal, appraisers are very lenient right now, most homes appraise.  And say you are like Simon and putting down $120,000 for your 20% downpayment, you probably have the ability to fork out another $20K if the place does not appraise. The price you are paying for the property has no changes, it’s still $600K.

I have had Buyers leave in the appraisal contingency but allow for a cash amount they are willing to bring to close, with a cap, if the property does not appraise. This is a nice alternative for those less risk tolerant.

I laugh when people say to me “hey, the real estate market is so hot, agents must be killing it!”  Remember every offer we write, we write for free. It isn’t until a purchase closes that we get paid.  This market is killing us! There just are not enough listings to go around for the buyers. Means many agents driving/writing/driving/writing day in and day out with no paycheck.  So heck yes we will be looking for ways for our clients to ‘Win’ – within their risk tolerance of course.

And if you have a home to sell? Call me! (206) 412 4663 – this is the time to get it on the market – you will be the ‘hot stuff’ in town. I promise.







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When is the Best Time to List a House in Seattle?

I get asked this often, when is the best month to list a house in Seattle?  It is true there is some seasonality to real estate sales, so this is something worth thinking about.  However, from my experience, the best time to list a house is when it looks the best, when it is show-room ready!  Rushing to get a not-so-shiny house on the market will probably leave more money not he table than would be gained by timing it just right.

That said, our friends at Zillow have an answer for you. No surprise springtime listings do well. May is your month! “Houses listed between May 1 and May 15 sell 20 days faster than the yearly average. They also sell for an average of $2,600 more.” 

Zillow’s Chart indicates that you don’t want to wait until July to sell your home as mid-summer, end-of-summer homes don’t fetch as higher prices. I think this is because many buyers are con vacation by that time!

This is all fun information, and if you can time it right, great!  Rest assured though that the 2016 Seattle real estate market is still a seller’s market and I don’t see much changing for the summer ahead of us!  (Sorry buyers – at least the interest rates re still very low!).

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Useful Map of Development Around Seattle

I don’t know who made this or how up-to-date it is, but this is a pretty good spot to start if you are wondering about development around your neighborhood.

Seattle in Progress 

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Buying Beats Renting in Seattle in Two Years?

As Seattle home prices have been on the rise, so have the rental prices.  Real Estate agents and lenders are once again starting up the conversation with consumers of why rent? Go buy a house right now and you will save money!  But how to determine if this is the right course of action for you?

There is much to educate yourself about, including all the cost to buy and cost to sell, when time comes. Also, being realistic about what kind of maintenance the home might need over the next few years and into the future. And importantly, how long do you plan on staying in the home?

I just read an article in the Business Journal about Seattle rents now being so high that buying beats renting  in just two years. This information was researched by Zillow and Zillow does provide an account of their methodology of how they came up with this ‘breakeven horizon’ where it MAY make more sense for a person to be a home owner rather than a renter. But Zillow agrees that there are many personal factors that an individual should the into account when considering this huge, life investment.



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Helping Veterans and Active Military in Real Estate Transactions

Happy Veterans’ Day!

As we thank and remember all our veterans and active duty military today we are preparing for a day-trip to Sequim to visit Papa Pete, our closest veteran hero.

I am proud to say that I recently obtained my VAMRES – VA and Military Real Estate Specialist designation and hard at work on the national MRP – Military Relocation Professional – certification. These two designations are training me to better understand military needs when it comes to real estate, the ins and outs of VA financing and how to assist in a military relocation. With all the bases around Seattle and active Coast Guard, I hope to enhance my ability to serve those who have served us!


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Looking for 2014 Real Estate Trends

The trending for 2014 has already started. Always interesting to read the predictions for the next year and then follow along to see if they come true. Many of the lists are just fluff but I randomly found one that had some points that have been more thought out. It is from “experts at the Urban Land Institute” and you can read it at CBS News.

It’s all very interesting and makes sense to me, especially point number two “second-tier cities will lead to recovery.” Yes – I just toured Seattle with a big time Los Angeles developer. He is VERY interested in Seattle due to the lack of available land in LA.

Also “condo development is on the back burner” rings true. Living in Ballard I see all the many, huge apartment buildings going up, some completed and available at high rents, some still in the works. I am certain if condo prices keep climbing in Seattle and the supply stays tight, some of these developers will choose to convert the buildings to condos for sale, as the article suggests.

I love “the suburban is going urban” part. I don’t think of Seattle as having ‘suburbs’ per se – having lived in Chicagoland I experienced the true sense of the word – and no land to really develop new communities. But I do see nearby communities, like Bothell, buiding their own urban centers which makes them great choices for those commuting to Seattle but wanting to stay home for activities.

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Seattle Sewer Lines – Post Two

In my last post I wrote about Seattle sewer lines and issues that homeowners are finding in sewer scope inspections. I wanted to give a little update for the situation my buyers found in a recent sewer scope of a home they were going to buy – the scope found a crack in the sewer line right before the City connection and we thought it was a toss up whether the City would fix it or not.

The City IS going to fix it!  Great news for the seller of this home. My buyers decided not to purchase the home for various other reasons but fortunately the seller can put the home back up for sale without costly repairs.

How did this all happen?  When my clients decided not to buy the house they gave me permission to give the sewer scope report and video to the listing agent. He submitted the video to the City and after viewing the video the City decided that it would take responsibility. I did have a lengthy talk with a helpful employee of the City who told me that the goal for a homeowner is to get a letter from the City that says the City will take responsibility. This does NOT mean the City promises to fix the problem immediately. If they feel like it is not an emergency they will continue to monitor the issue and fix as needed / there are resources available.

If you are a homeowner in Seattle and you get a sewer scope where there is question of homeowner vs. City responsibility, call me (206) 412 4663, I will get you a short explanation, list of contacts and information for where to send the video.

Oh sewer is fresh on my mind….  just got back from another sewer scope for a different client. This one has dips in it, two of them, under the driveway about 8 feet deep. Oh well, better to know now than after purchase, after all NOW everything is negotiable!

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