Not All Settlement Delays or Low Appraisals are Cause for Concern
When 9705 Cheshire Ridge hit the market on May 5th (2023) it was the only garage townhouse for sale in all of Manasas, Bristow and Gainesville that weekend. It was not surprising that, during their four days on the market the home got six offers, all above its list price of $459,000.
Getting multiple offers on a listing is always validating for the sellers. And the way buyers have been swarming to listings this year, the offer prices can be very exhilarating. However, evaluating multiple offers, and which one is the best of the heap, is not as easy as picking the highest offer.
In the case of the multiple offers that the seller of this Manassas townhouse had to choose from, four were buyers using VA loans. That meant those VA buyers could not, under any circumstances, waive appraisal. Two were conventional loans, one of which waived every single contingency. The offer the seller chose went five percent above list price and offered a ten thousand dollar low appraisal gap guarantee (a.k.a. gap coverage.) That meant if the appraisal came in low, the buyer would pay ten thousand over it, but never exceed their original sales price. That buyer was one of the VA loan buyers. The seller felt strongly about giving a veteran a chance.
The back up offer being held was shy of the high offer price of the primary buyer by seven thousand dollars. That was the buyer that had no contingencies. In the case of a low appraisal, if the ten thousand dollars didn’t make it to the back up offer’s price, it would be an easy decision to move to the back up position. That is exactly what happened. Unfortunately, the back up buyer had already found another home so the seller was left with the decision to start over with a new buyer or accept the ten thousand over appraised value. (Appraised value, incidently, was a hair over list price.)
The seller, knowing that there was no guarantee of getting the same enthusiastic response the second go round, and that there would be mortgage, HOA and utility payments to make to go back on the market in hopes that they could get a higher offer, wisely decided that a bird in the hand was worth two in the bush. Getting ten thousand dollars above a fair appraised value was a great result, and it did accomplish the goal of helping a veteran buy a home.
On May 31st, after a slight closing delay caused by the lender, this townhouse went to settlement for $470,000. That was the third highest sales price in the neighborhood ever! The seller did a fantastic job taking a rather bland townhouse from their purchase in 2015 and updating it to get such a fantastic market reaction. The result would not have been possible without their updating and listing preparation.
If you are thinking of selling your Manassas, Bristow or Gainesville townhouse, don’t rely on market conditions alone for a great outcome. Buyer enthusiasm is what drives multiple offers, and high ones at that, into being. Between listing preparation, proper pricing and professional marketing, you can hit the top of the market too. Get in touch and let’s have a conversation.
(All images in this post are owned and used with permission by Home Visit.)
The opinions expressed in this blog are those of Chris Ann Cleland, not Long & Foster. All content is written by Chris Ann Cleland without the aid of artificial intelligence.