Shopping for a mortgage when under contract in a hot seller's market

[penumbra]

Hi everyone,

Looking for advice from someone who has bought a house in a hot seller's market like what we're in. We live in one of the cities you read about with the fastest rising housing prices, and we're buying in one of the more desirable neighborhoods.

I've gotten pre-approved by 4 lenders: 3 doctor mortgages and 1 non-doctor's mortgage from ASMC, the preferred lender of our real estate agent's firm (this state bans kickbacks, so I don't have concerns about financial COIs).

ASMC came in with a higher interest rate, but they're the only one able and willing to do a fully underwritten pre-approval, which should sweeten the deal for sellers if we are going up against people offering all cash.

In a hot seller's market, can I make my offer using the ASMC fully underwritten pre-approval letter, and then do a switcheroo and apply for a doctor's mortgage once we're under contract? I'm not clear on what the potential impact is of that on the likelihood of the deal going through (mainly pissing off the seller).

Thanks for your advice!

[venacontracta]

I’m not a real estate professional but I’m under contract to buy in a hot market after losing out to cash on two offers.

I wouldn’t expect sellers to understand the nuances of levels of mortgage approvals to this degree. I am not sure what you are doing is enough to compete with cash. Are you also waiving the appraisal contingency? What if the house under appraises? Sellers don’t have to worry about this with a cash offer.

Switching financing source once you have an accepted offer seems like it should be something you can do, however. I fail to see why the sellers would be upset about this and even if they didn’t like it, I’m not sure that would particularly matter once you’re under contract.

[penumbra]

I’m not a real estate professional but I’m under contract to buy in a hot market after losing out to cash on two offers.

I wouldn’t expect sellers to understand the nuances of levels of mortgage approvals to this degree. I am not sure what you are doing is enough to compete with cash. Are you also waiving the appraisal contingency? What if the house under appraises? Sellers don’t have to worry about this with a cash offer.

Switching financing source once you have an accepted offer seems like it should be something you can do, however. I fail to see why the sellers would be upset about this and even if they didn’t like it, I’m not sure that would particularly matter once you’re under contract.

Fair enough. I’ll take back “cash” and say “multiple offers.”

[StateOfMyHead]

As far as I know if your financing change doesn’t cost the seller more money or extend the agreed upon closing date I believe you can go with whoever.

I have sold 2 properties in the past 9 months and what I wanted from non-cash offer was no inspection contingency and buyer willing to pay the difference if property doesn’t appraise.