by Teresa Larson, Village Real Estate, Murray, Utah
20+ years year real estate experience
(801) 750-5446

Even though an offer sounds good because it has the highest price to a seller there are potential problems with picking the highest priced offer.  The main problem being; you will need to get an appraisal for the amount of the sales price unless the buyer plans to bring in extra cash for the amount over the sales price.  Most buyers have the home purchase figured out to the penny and are not going to have additional money over the planned down payment and closing costs. When a property is listed for sale generally the seller and their agent have looked over recent sales of similar homes, a comparative market analysis has been done to help a seller choose the price to list the home at. The home has been priced at the perceived market value.

Appraisal Standards and Market Fears

The interesting thing about multiple offers is that due to the lack of housing inventory the market becomes inflated quickly by buyers making offers that are over the list price of the property. This has historically been repeated in the past several times. Most recent was just prior to 2007. During the process of buyers offering more than list price and the shortage of available properties at the time, prices climbed to unhealthy highs. Prices rose over 25% year over year in most of our area.  People that watched the numbers cried of future doom and sure enough it happened. We do not have that same situation now due to constraints and limitations put on the lending industry. Lenders and appraisers have been held more accountable for what is approved at the mortgage companies and banks. This is the reason that appraisals are sometimes hard to get at the offer price.

Ideas for Buyers

If you can save up enough money for down payment and closing cost without asking for the seller to pay some of your closing costs you will be one step ahead…………read more

©Teresa O Larson PC, 2014