relevance of downpayment to seller

why would a seller on a short sale decide to send a lower offer with a bigger downpayment to the bank over our offer with a smaller downpayment?

here's the story:
we put an offer down on a short sale a week or 2 ago. the listing agent (who is the parent of the seller) said there was another offer made for less money a day or two before we made ours, but their downpayment was bigger. they kept asking if we were willing to increase it, and we refused because we want the extra money to do work on the house. we retained a lawyer, had contracts made up, met to go over and sign, moved money around to give them a downpayment check. all the while the other buyer was doing the same thing. both offers went to the seller's attorney. ours was for $20k more, but the seller decided to go with the offer for less money with the bigger downpayment as of yesterday. now we're waiting for our check and contracts to come back to us in the mail so we can resume the search. i'm annoyed that they wasted my time, and i don't understand the decision.

TIA for any light you can shed!

Message edited 9/5/2009 8:25:07 AM.

Re: relevance of downpayment to seller

The only thing I can think of is that they felt a larger downpayment would increase the likelihood of the buyer securing a mortgage so that the deal wouldn't fall through.

Re: relevance of downpayment to seller

I agree with the PP. A larger downpayment means that less of a mortgage needs to be secured.

I'm sure with a short sale the bank wants the deal done, and doesn't want to risk the deal falling through if you guys have issue getting the mortgage.

Re: relevance of downpayment to seller

Re: relevance of downpayment to seller

even so - the seller probably wants out of the house sooner than later and doesn't want to take the chance of a mortgage not being approved.

the bank probably already approved the price that they had to sell and since the seller isn't making any money on this (short sale) your higher price means nothing to the seller.