Cash Sales Curb First-time Home Buyers Ability to Purchase

                                                         CASH IS KING!!!!

According to the National Association of Realtors, cash sales make up at
least 30% of home sales today versus 10% of the home sales ten years ago.

Here's why:

Cash offers provide sellers a simple and easy way to sell their home.  No need to worry about
a buyer qualifying, the home appraising or the sale falling apart at the last moment.  The
closing costs on cash sales are low and the seller doesn't have to participate in the first
time home buyer's closing costs.

Cash offers also provide a great avenue for investors to purchase homes and attain a good
rate of return on their investment.  Since banking interest rates are so low and the stock market
unpredictable, investing in homes at current low selling prices makes good money sense. 

With the housing market experiencing low inventory and cash buyers/investors
snapping up everything in sight,the ability of a first-time home buyer
(who requires a financed loan) to purchase a home in a multiple offer scenario
is very very low.   It is not unusual to see multiple offers for a home where three
or more offers are cash and 3 or 4 offers require a loan.  Guess which one the seller
will pick....CASH! It's not "always" about the price.

One of the best avenues for a first-time buyer to pursue would be to search out new home
builders.  These new home builders provide a variety of financing options as well as absorbing
the buyer's closing costs in the price of the home.  It does take a while for the home to be built
but it's much better than making offer after offer after offer only to get shut out by an investor's
cash offer. 

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Short Sale Definition & What Info to Provide the Lender & Realtor

Here's my definition in a nutshell: A short sale is nothing more than negotiating with loan holders a payoff for less than what they are owed. Otherwise, a sale of debt generally on a piece of real estate, short of the full amount owed. It does not extinguish the remaining balance unless this is clearly settled in the acceptance of the offer. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing since there are legal and other carrying costs that are associated with a foreclosure. This occurs on a daily basis since many homes have loans that are considerably higher than the current value of the home. If you would like my Homeowner's Short Sale 16-Step Instructions emailed to you please contact me through this blog site.

Latest Hoop to Jump Through when Qualifying for a Home Loan

Hear Ye Hear Ye All Loan Applicants! The lending industry continues to tighten the underwriting rules on every facet of the mortgage process. In the past few weeks, lenders have had several investors make it a requirement to verify the source of an applicants' earnest money deposits. Previously, the industry standard was to only verify deposits that were greater than 2% of the sales price, or that were part of a gift from a family member---and that verification process was pretty loose.

As you might imagine, now that lenders are looking at these deposits more carefully, they are finding all sorts of situations from credit card advances, money from friends and employers, or money they can't track at all. BIG PROBLEMO for you the Buyer!!!

Sooooo...all you loan applicants out there....your latest loan process hoop to jump through will be to generate a paper trail for your earnest money just as you would for a gift or the sale of an asset. Are we having fun yet???

Don't Make Major Credit Purchases when Qualifying

Home buyers---don't go on a spending spree using credit if you are qualifying to purchase a home. Your loan pre-approval is subject to a final evaluation of your credit report just a few
days prior to closing. Every $100 you pay per month on a credit payment could cost you about $10,000 in home eligibility ie. $300 car payment could mean that you qualify for $30,000 less in a mortgage. Even if you have sizable savings, don't make any large purchases until after closing. The last thing you want to happen is to have your loan declined and lose your new home.