Last week I wrote about my pops and the decision to put the family homestead on the market. Over the weekend the house received two offers.
This buyer was willing to pay the full asking price (yes in a market like this, read on). However, the contract was contingent on the sale of the potential buyers (overpriced) home and my agreement to engage in a seller assist (see below) where I would pay for a percentage of the buyers closing costs.
Was willing to pay half of the asking price. No stipulations, just a straight up bid from a potential buyer who doesn’t need to work any fuzzy stuff to purchase the home. +1
According to brokeroutpost.com:
A “seller assist” is a feature of many loan programs that is used to help a buyer pay for a portion of their closing costs. In our current economy with housing markets slowing down, one could see home prices falling. A great incentive to sellers as well as buyers is having these seller’s incentives in place. This allows for home prices to remain steady which helps everyone over the long term.
I love it, “This allows for home prices to remain steady which helps everyone over the long term“.
Translation: This allows home prices to remain overinflated, sets it all up for even greater decline, and produces yet another underwater borrower.
I am ready to sell, and am prepared to do so at a price less than the asking, 50% was just a little more of a discount than I’d like to agree to right now. I hope I don’t regret it. Yup, declined both offers and walked away with economic confirmation about a problem that still exists in housing and in the greater economy as a whole. There is no fear of debt.
A bit too low in their offer, Buyer B didn’t need to sell before they could buy, and instead was set to bring cash to the table. Buyer B has a better prospective of where this market is headed. +2
It's wild that folks like Buyer A are still out there, trying to figure out a way to borrow even more. Buyer A is likely already underwater on one home, and before he or she even sells it, is prepared to enter into an agreement to do it all over again, if they can just get the help of the seller to extend their credit line.