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0 pointsgruez1y ago0 comments

>they can collect pricing info on houses, run analytics

AFAIK house sale prices (ie. property transactions) are open in many (most?) jurisdictions.

>and swoop the deal with a slightly better offer

How does that even work? The winning bidder is presumably someone who gave the highest offer. Why would another company pay above and beyond that, considering that there's probably several other serious buyers who aren't willing to pay more?

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dumbfounder1y ago

The terms are not public until the house is sold. In the contract pending state you don’t know how much it is going to sell for. Theoretically if they saw a buyer accepting a crazy low offer they could alert the troops.

But it doesn’t need a lot of the data in that document, so really they need a way to redact all the unnecessary data to require less trust.

Edit: words.

gsharma1y ago

The deal isn’t always about the price. For example, a $1M house bought with $100K down and $900K mortgage is a worse deal for the seller as compared to $500K down and $500K financed. Assumption here is that it is more likely to get a $500K loan irrespective of the appraised value of the house.

A lower all cash offer (say $975K) is likely a better offer for the seller because it reduces the risk for them and closes the transaction much quicker than a mortgage transaction.

I have been a buyer in two transactions where my offer was slightly lower than the highest bidder, but with better terms.

ryandrake1y ago

As a home buyer, I've been beaten many times by an all-cash offer that was significantly lower than my financed offer. For example, a $450K all-cash offer where they'd close in 7 days beat my $525K 80/20 offer where it would have taken me 25+ days to close.

t0mas881y ago

This makes sense for the seller depending on how often a financed offer falls through. Our agent mentioned that in Amsterdam for example over 1/3rd of the offers with a financing condition fall through. And they do so weeks after the signing of the agreement so it costs the seller significant time and money.

With such a high chance of not actually getting the sale done, sellers are motivated to take 475 immediate cash instead of 525 with a 1/3rd risk of having to do it all over. Especially if they need the cash to buy their next home.

JumpCrisscross1y ago

> I've been beaten many times by an all-cash offer that was significantly lower than my financed offer

Note that all cash commonly means no financing contingency. I put in an all-cash offer and financed it. I just didn’t have an out if I couldn’t find financing I liked. (Legally.)

jogjayr1y ago

> a $1M house bought with $100K down and $900K mortgage is a worse deal for the seller as compared to $500K down and $500K financed.

Do sellers in the US know how large your down payment is? AFAIK that's not a thing in Canada. Offers either have a financing condition, or don't. If the offer doesn't have a financing condition, the buyer might be paying cash. But they could just be trying to present an offer with better terms, gambling that they'll definitely find financing somewhere or the other.

happyopossum1y ago

Yup, the seller is (at least should be) made aware of the financing structure, as it’s part of the offer.

Every time I’ve sold a house it’s been a factor in deciding which offer(s) to pick or counter.

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