Wait...why didn't we get it???

"Tim, what am I supposed to do?," my client exclaimed this afternoon.

We were standing on the dead grass in the front lawn of plan G for this particular client. I could sense the frustration in her voice, I could see it in her eyes and her body language as we stood looking at this "new" home. I felt it too. You knew there is a story coming...

My client is a lovely woman who is trying to get her family a new home. She is a single mom who works hard to provide for her family. Last week we fell in love with a beautiful home in Moreno Valley. The home was a little more than she could afford. We made a very reasonable offer...but we just couldn't reach an agreement.

So we met late last Wednesday night. The house was perfect. It boasted a big back yard, 3 bedrooms, a den, and it was perfectly in her budget. We got to work on submitting an offer.

The listing price was $145,000. The seller was offering $5,100 in closing costs. This nets the bank (the seller) $139,900. Our offer was $155,000 with $10,000 in closing costs. This offer nets the bank $145,000. A difference of 3.645% above the banks net.

I begin calling the listing agent daily...multiple times a day. I speak with the agent on Saturday and he tells me that they have received 2 offers. He told me to call his assistant to determine if we were "competitive" with our offer. I called her on Monday, Tuesday...finally chatting with her late yesterday afternoon. She said she was unaware of the other offer price and that she would call me back. I am still waiting for that call.

My client wanted this home very bad. So, I called again this morning, and was informed that they had accepted another offer. I called the listing agent and asked him how far we were from being accepted. His response...

We had the higher offer!!!!

Why would this be? How could the bank accept less? Who makes these decisions?

The only logical explanation I can come up with is that the bank (sellers) are in the business of closing deals. Therefore, someone had to have a stronger offer. What constitutes a stronger offer (more downpayment, better pre-qual letter, higher credit scores, etc...)?

Either way...the ebbs and flows of this market continue to change. Summer is typically a very competitive time of year for buying a home. This year proves to be more challenging...because there is no rhyme or reason to which offer the banks are going to accept.