Are sellers motivated by the buyer's down payment amount?

Question

Hello Everyone! Hope you're all doing well! I just began my journey as a REI and I wanted to get some insight on something I thought was a bit odd. Are sellers motivated by the buyer's down payment amount?

A really good friend of mine advised me to take the next step in the process and talk to a realtor in order to get some momentum with the process. "You have nothing to lose but so much to gain". So I did! I'm glad I did because it gave me more action items to address before moving on to the next step.

I spoke to a broker associate through realtor.com to get insight on investing on a duplex using an FHA loan. The broker told me that sellers usually go with the buyer who has a higher down payment if they are faced with multiple offers. She recommended me to put more money down in order to increase my chances on closing a good deal. To my understanding, the seller will still get their money regardless of how much a buyer puts down, right? I asked her but I felt like she was not able to give me a straight answer. Is there something I'm missing?

P.S The only reason why I went through realtor.com was to get over that hump and start taking steps in putting myself out there. I also feel like doing this will prevent me from having analysis paralysis :). I'm currently learning more about the FHA loan and getting my personal finances in order so I can start looking for an agent and lender in the Bay Area through the BP community.

- Robert

Russell Brazil · Answer

In multiple offer situations, absolutely.  People with large down payments have a higher probability of closing. People with low down payments have a higher probability of not closing.

Jay Hinrichs · Answer

yes its part of the consideration..  low down payment deals have a way of not closing.

Jamie Derasmo · Answer

Good first steps into venturing into REI! There are so many factors seller’s take into consideration, not just price. In this current market, it’s all about terms (waived or Informational inspections, $XX amount over appraisal, closing times, etc) Along with working on your personal finances to save money, I encourage you to reach out to multiple RE agents now, ask who they’re mortgage lender is, talk with them. Just having your finances in order are not enough, it matters who you partner with. Get an agent who knows the market and can help craft a competitive bid, and with a mortgage lender with a good reputation and quick close time!

Good luck!

Robert Ortiz · Answer

Thank you for the clarification, everyone! I'm going to start budgeting for a higher down payment just in case.

Brian Garlington · Answer

@Robert Ortiz    My team helps people with this all the time. Other things that can be done are offering a faster closing as well as the timeframe of contingencies if any.

Are sellers motivated by the buyer's down payment amount?

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