House is a 2 bedroom, 1 bath 900 sq ft home in a great neighborhood in Minneapolis. 1.5 days after listing house at $200k had open house. 26 groups showed up, and we got 4 offers that night.

The best two offers are as follows:

1. $207k. No financing or appraisal contingency (if financing isn't obtained I'm supposed to get the earnest money.). Normal inspection contingency. Buyer asks for 0 closing costs. Close in 6 weeks. 20% down. $5,000 earnest money. Buyer appears to be a married 55 yr old woman who owns a boutique business and is buying on her own. Possible divorce? Sale is contingent on selling her home, but she's already accepted an offer for $420k and passed inspection.

2. $210k. No financing or appraisal contingency (if financing isn't obtained I'm supposed to get the earnest money.) Buyer 'waives right to renegotiate based on inspection except for major structural issues'. Buyer asks for 0 closing costs. Close in 4.5 weeks. 3% down. $1,000 earnest money. Buyer is a single 30 year old woman who works in marketing.

My uneducated guess is that the appraisal will come in between 200k and 210k. I'll guess $204k. I bought for $170k in 2014 and did about $12k of renovations - mostly a bathroom remodel. House was built in the early 1900s. It's in good shape and looks nice. Biggest known issues with the house are:

-original windows that aren't in great shape
-non-urgent exterior issues with yard/retaining walls/detached garage

If buyer 2 has qualified for the Fannie/Freddie first time buyer 97% conventional loan, don't see a reason not to take the higher amount. Just ask for proof of a pre-qual letter.

Buyer 1 is obviously serious due to the earnest money and the down payment, but you never know what can go wrong with the contingency around their home sale which can add incalculable risk. Also having the standard inspection contingency opens you up to higher risk they find an issue that allows them to pull out.

I'd go with Buyer 2.

Not an agent, not an attorney...

But the answer is obvious. Accept the 1st and then accept the second offer as a backup. You can do that...

At least in MO.

Also, I obviously have not read your contract. But typically in MO, in the case of offer 1, yes you get the earnest money. But that doesn't just mean that they are off the hook. If there is no financing contingency and they want financing but it is unapproved, their offer defaults to a cash offer.

So they are legally liable for the whole $270k. You will almost certainly have to sue to get anything more than the earnest money. But such is the way of the world.

Jesus, wtf. I read that as $270k twice now. Im done with this thread. Sorry that was so unhelpful.

OP do you have a new place to live already or does that not factor in here?

Also seems like option 1 imo. 3k after tax ins't too much imo.


Also, we all already knew this but, your house in my neighborhood would be worth less than half of what you're getting for it. And obv if it somehow was in NYC would be worth like 6x.

I'd go with #1 or ask #2 to match earnest money. Too easy for #2 to walk away from $1k earnest money when the house appraises for only $200k.

We have an offer accepted on a new house, closing in one week

Pokabandito - if she has the Fannie/Freddie 97% deal but the house doesn't appraise, does she have to come up with the difference in cash in order to close ?

I would assume both offers are from prequalified buyers? In that case, I'd go with #2 assuming it's a Fannie/Freddie deal. I wouldn't be that concerned about the appraisal unless it was like 10%-ish off.


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Explain. If the house appraises for $200k what happens?

The LTV can't be higher than 97% of appraised value, so if appraisal comes in low buyer would be responsible for making up the difference.

And you guys don't think I should be worried that that buyer may have to come up with another $5-10k of cash?

The buyer wants a quick close, has almost no contingencies, and put in an offer significantly higher than listing. I think they are likely a pretty serious first time buyer and can come up with the difference if they have to.

Pretty much this, although my thought was more along the lines that appraisals have a tendency to run high compared to sale prices, at least in my experience.


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They do run high if the appraisers want to continue finding work in the future.

I generally assume a buyer putting down 3% won't have the extra 5-10k if the house doesn't appraise high enough.

i assume you have not already countered everyone and asked for best and final including removal of contingencies? if you haven't yet then do this first.

Cat - we had asked for final and best after the first two offers (both worst than these two) came in the afternoon of the open house day. We never countered anyone.

This actually happened a month ago. We took the $207k offer. We ended up paying about $1k towards inspection items, which was fine. The house did appraise at $207k or higher with no lender repairs required (though I didn't receive a copy and don't know the exact amount). Everything is looking good for closing.

After the appraisal came in I had second thoughts about rejecting the $210k offer. Clearly, I didn't and still don't know where it would have come in for her lender. It sounds like it was a close call and our decision was fine. But the more aggressive choice very well might have worked out. Thanks for the input everyone

I would've snap taken the 2nd. Quicker close and less hassles with the closing. The $ amount is negligible.

I didn't read everything, but seems like your entire worry was that this woman wouldn't be able to come up with a few dimes more to close? (When she already is willing to shell out 5-10k for the actual closing?)