The housing market needs more help than it will likely get. The early bank bail out money didn’t even "touch" the market.
In fact, many industry sources say that when the banks started receiving their money, they were able to slowdown their REO (real estate owned) activity. This means that homes they had already foreclosed on…and…homes they had slowed up on marketing, will hit the market soon and increase inventories. When these are dumped on the market, at greatly reduced prices, it will have a dramatic affect on the sellers who are not in trouble and trying to get legitimate prices for their homes. It’s not good!
We need help for first time buyers and buyers in the $200k to $300k range. The banks are really clamping down, doing now what they should have done back in ‘03 when thy started this mess.
Check it out…in ‘03 - ‘06 these banks were wheelin and dealin, handing out mortgages without validating incomes, offering "0" down and allowing closing costs to be put on top of the purchase price, giving loans to people who had credit scores in the low 500’s and debt-to-income ratios of up to 60%. Not so loose today? Many banks want to see a credit score of 620+, 40% or less for debt-to-income ratios (including the new mtge amount), and a down payment of 5% or better. (3.5% for those who qualify for FHA.) Add to this closing costs of about 3%, and the buyer has to have about $16,000 or more stashed away. This scenario is preventing sales in the lower end and keeps tripping uphill, into the high end properties as well.
Take a typical buyer with $800/mo in credit card debt, a $350 car payment and applying for a mortgage on a $200k home where the mortgage payment - at a great rate of 5% - is $1,074. Add in tax of about $200/mo and $60/mo for insurance = a total of $2,484. If this represents 40% of income, this buyer has to be making over $70,000/yr. The buyer pool is shrinking fast, especially with so many - one of two married buyers losing their job?
Now, for some good news; homes are still selling and good loan officers are finding ways to get the buyers qualified. There are also some terrific programs available through the FHA. Here’s an example:
I recently got a single mom a home through the FHA 203k plan. This program allows the buyer to get up to $35,000 over the purchase price to make repairs or improvements in the home. We negotiated a $122,500 purchase price on a foreclosure the bank was trying to get $130,000 for. We negotiated for $3,500 in closing costs to be paid by the bank as well. She got all new appliances, new carpet, repairs and painting done for another $15,000. All she had to come up with was a 3.5% down payment. The home was built in ‘04 and was assessed at $198,000. The prior owners had paid $231,000 for this home just four years earlier.
If you can buy right now, there are so many tremendous deals out there, take advantage of this "Buyer’s" market and buy! We’ll put you on a free automated search where you’ll see all the new listings the same day Realtors do…put you right up at the front of the line!
If you’re selling, do all you can to protect what equity you have. We’ll help you find the proper price point for your home. (This service is free.) You can list with us for as little as 1.3%…or…sell your home yourself for as little as $495.
If you’re in trouble with your mortgage payments and know you can’t sell your home for what you owe, give us a call and we’ll go through the ’short sale’ process with you. Doesn’t cost you one cent to learn what you need to know.
When we visit with a home owner that’s considering the sale of their home, we look the home and property over, give them a free "comparative market analysis," and leave them with the information they need to make an informed decision. We do not have anything with us for anyone to sign, we do that later if we get a call from the home seller asking us to help.
We can help you sell your home and save thousands!
We can negotiate for you when you’re buying and put cash in your pocket at the close.
If you have a home selling or home buying story you’re willing to share, please post a note on this Blog…we’d love to hear from you!
Back again soon.
