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Aug 18
2008
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I've been saying to people that NOW is the time to buy. My sense from buyers in general is that they have all the time in the world to buy a home. I mean, after all, the media has told us what great opportunities are out there and has spoken about the influx of properties... all of which is true. But is time really on your side???
Tammy, I've found a great home I want to see!
I've had countless times where a buyer will call me about a home that they've seen and would like to view. At the time of the call, they are usually very excited by what they have seen online or driving by and can't wait to get in the home. I make some phone calls to find out that this great deal has already been taken... it now has a pending sale on it. (Just happened today, in fact!) I can't recall how many times this has happened, definitely too many to count. The point being, that the good deals are coming and going very fast!!!
Low-ball offers don't always work
Here's another scenario. We find a home that is still available and because of this "great buyer's market", the buyer decides to offer a very low ball offer. After all, they have heard of their neighbor's best friends' dog doing the same thing and getting the house. O.K., I'm obviously being very sarcastic! Again, several times this has happened. That home receives another offer that is higher and closer to asking price and my clients lose out. This type of buyer usually does one more of these transactions on another home (a little bit higher bid) to lose out again. By this time and the third house, the realization has come about that most places are priced correctly and I've already done the homework as to what price to offer. Guess what? The buyers are now ready to listen and buy the third home that has come available.
Financing Trends
Possibly, NO I'm going to say that this IS the biggest factor that REALTORS are struggling with in this housing market. Buyers can't get qualified because of poor credit, or not enough down or a change in the rules. Specifically to our first time home buyer market. While the financial guidelines where too loose in the past, now we struggle with the tightening of the reins and getting good buyers qualified. As of October, the first time home buyer will lose out on the down payment assistance program... IT'S GONE! In fact, if you don't have an offer in at the moment, you can no longer qualify for this program as of today's date.
Mortgage guidelines are starting to ask for more down payment. It's not uncommon for a conventional loan to require a 10-15% down payment. And the FHA guidelines are changing constantly. I've had buyers approved and ready to go, to have the mortgage guidelines change in midstream. It's a frustrating process for the buyer, REALTOR, and mortgage lender since we really have no control over what the federal government requirements are going to be in relation to these mortgage loans.
Can first time home buyers afford to wait?
CAN FIRST TIME HOME BUYERS OR ANY BUYER AFFORD TO WAIT?
I REALLY DON'T BELIEVE SO. It is one of the best times in the market to buy but as we continue to progress, it will probably be one of the hardest times to buy. If the guidelines continue to tighten, more money is going to be required for a down payment, making the home buying process difficult for many buyers.
Are we going to go back to the place where you'll need to have 20% down, excellent credit and still have interest rates in the double digits as in the 80's? Boy, I hope not. But we'll see, sooner or later, won't we?