My Realtor Included my Pre-Approval Amount With my Offer

[Alecia Loveless]

I’m making an offer on a MF and my realtor included my pre-approval amount with my offer. I offered $25,000 less than the asking price as there’s no comps anywhere near the asking price. Granted this building is much nicer than anything else on the market, but my offer is also $30-40000 more than the other existing comps.

The owner only countered $5000 lower than the asking price. I think he’s just expecting me to pay the full amount I’m approved for since he knows it. The numbers still work at the higher price but my cash flow drops from a very good deal to just a good deal.

I’ve worked with this realtor for 20 years and he knows what I look for in a property but this is the first time I’ve attempted to get a mortgage. I’ve always done cash deals but since money is so cheap now I figure I can do more deals this way.

I told the realtor I would revisit an offer after the New Year.

Any advice for if I should just walk away from the MF or recounter and what I should do about the pre-approval letter next time, because clearly it should have just said the amount I was offering or something should have been handled differently, would be greatly appreciated.

And the 4-plex really would be worth the original asking price and probably more if it was one town over, location, location. Right?

Thanks for any advice anyone with more experience can give me.

Alecia

[Russell Brazil]

No ones looking at your preapproval when they are negotoating.  If the listing agent is doing their job they are calling your lender to verify you can afford the property comfortably. If the lender tells them you are at your limit, then they will believe theres a high probability the transaction will fall apart due to your financial position.