Home | Newsletter | Advertise
loading...

Tight Housing Market Means More Cash From Buyers

  • May 10th 2012

by Shilpi Paul

Tight Housing Market Means More Cash From Buyers: Figure 1

We know that in the current market homes are getting snapped up within days of hitting the market, receiving multiple offers and often seeing bids much higher than the asking price.

This led UrbanTurf to wonder: What happens when the final sales price is higher than the appraised value of the house? How does that impact a buyer’s overall outlay?

William Slosberg of First Savings Mortgage Corp. offered some insight.

Since lenders lend based on either the sales price or the appraised value, whichever is lower, Slosberg tells us that a buyer who wins a home by bidding up the price to well above what is being asked should be prepared to make up the difference outside of the loan.

“If the borrower was applying for an 80 percent loan, the lender would lend him 80 percent of the appraised value and the borrower would have to come up with all of the rest of the money themselves,” he said.

Of course, many buyers would just walk away from a deal in which the appraised value comes in lower than the price they offered, but there are always those that love a place so much that they would be willing to throw in the extra cash regardless.

Similar Posts:

See other articles related to: lending, loan, seller's market

This article originally published at https://dc.urbanturf.com/articles/blog/tight_housing_market_means_more_cash_from_buyers/5517.

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!

First-Timer Primers

Intro guides for first-time home buyers

Red Flags Revealed During a Home Inspection Top 5 Tax Breaks For Homeowners Tax Relief for DC Homeowners
Condo Fee Tutorial What is a Rent Back? 10 Ways To Tell If a Home Renovation is Well Done
Obtaining a Basic Business License For Your Rental What is an Adjustable Rate Mortgage? The Splitting the Rent Formula
How Much Cash Do You Need to Buy a House? Is This Condo Building Financially Healthy? Interest Rates and Mortgage Points
The Scoop on Mortgage Insurance

Unique Spaces

Awesome and unusual real estate from across the DC Metro

The Most Intriguing Loft in DC The R Street Firehouse DC’s One-Room House
Dupont Circle’s Old Frat House To Become Alley Home Best Transition From a Garage To a Home The Roundhouse
Tilden Gardens Restaurant-Turned-Home Hits Market Next Week Logan Circle’s Most Intriguing Garage Frank Lloyd Wright Goes Green in Kensington
Sears Bungalow Gets a Modern Makeover Old Town General Store Becomes Three-Level Home Making the Most of a Skinny House
A Studio 27 Renovation on Capitol Hill Once a Carriage House, Now a Home The Bank that Became a Home
From Pie to Hooch to Heroin to Home The Live-Aboards of Gangplank Marina A Treehouse with Rock Creek Park As A Backyard
Modern Tranquility in Sperryville Saddle Up For Stable Living Throwing a Curve at 550 Square Feet
A Modern Hilltop Retreat Tilden Street Restaurant Becomes Spacious Home Focus on Design: A Vastu Unit at 22 West
The DC Area’s First Net Zero Home A Yankee Goes Green DC’s First Carbon Neutral Home
Eco-Friendly Alley House Off H Street The Gym, The Stables and The Firehouse