I was under the impression that we are in a Buyer’s Market yet after submitting two offers I am thinking differently as they were rejected. I pay close attention to the media regarding sellers accepting low offers yet I cannot seem to get one accepted. I really wanted to get in on this market and purchase a home. My offers have been $20,000 - $25,000 under asking price which I do not feel is unreasonable given the market. The sellers are not even countering my offers. I have been looking a little above my comfort level with the thought that I could get the house down to my comfort level. Where are all the bargains?
The market is changing in a different direction. Even media reports are showing that the resale Real Estate Market is on the rise. You are discovering what many purchasers already have. The media is a very strong tool and can definitely be a positive one or negative one. Remember the media is speaking of the country on a whole when discussing the Real Estate Market. There are pockets of Real Estate, which either have not been affected by the downslide of Real Estate, or that are on the upside of that market. Remember the market started to fall years ago, before anyone even realized it. The Real Estate Market is like anything else in life, it is cyclical and we are now seeing the upside of the market. I don't believe it will be too long before our particular area slides right back into a Seller's Market.
There are many indications that this is happening at the present time. Sellers have been receiving multiple offers on their homes, homes are being sold for the asking price and there seem to be more buyers in the market then Sellers.
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You have to remember not everyone on the market has an urgent need to sell. There are not as many foreclosures or people in "trouble" in this particular area. In fact I haven't seen any more foreclosures in this market then I saw in the past Seller's Market in the Phoenixville Area. Sellers on the whole have been more reasonable when negotiating price with purchasers however the purchasers also have to be reasonable. If it is a deal you are searching for you are putting yourself in the position of an investor. Investors will place many offers, sometimes up to 15-20, and watch to see which one they will obtain for the price they want. Sometimes none of the offers are accepted.
But you state you are looking for a home, not an investment. Perhaps work your offers from that angle. The interest rates are very low. Although your home is an investment look at it as a long term investment not one that you will make money on right away. This should help change your view just a bit.
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I would definitely start looking in your comfortable price range. Although home prices can be negotiated normally not to the degree you would like depending on the price range. You need to be more realistic. The reason you are not receiving counter offers is because you are insulting the Sellers. Once you insult the Seller it is difficult to get them to negotiate and with good reason.
My best advice is to be sure you are working with an EXPERIENCED Realtor. Look at homes in your comfortable price range. Remember you are not going to pay more than the home is worth as it will be appraised by the bank you obtain the mortgage from and they are very strict at this time. Have your Realtor present you with the comps in the area. You will want to look back over the past 4 months and if there are no comps you may need to go back 6 months. Look at the comps and compare them to the home you want to purchase and make an educated and well thought out offer. This will more than likely assist you in obtaining a home you really like. Good luck with your search.
I have been hearing how stringent the mortgage industry has become when trying to obtain a mortgage. What will I have to be prepared for when getting pre-approved?
The mortgage industry has become more stringent with their criteria to obtain a mortgage, however this should not stop you from trying. There are still programs out there that may be helpful such as FHA and USDA financing.
To begin the process you will want to have at least 3 months of paystubs, the last 2 years of income tax returns and you will provide the lender with your social security number as well as your work history.
If you are receiving a gift from someone for the down payment it has to be completed in a very specific way. The gift giver must show the money coming out of their account, you must show it going into your account and the gift giver must sign a letter stating that the money is a gift and does not have to be repaid. This was always a requirement but lots of people don’t know about it and then question this policy when it becomes an issue.
It is also taking longer to make it to settlement. For FHA you definitely want to allow 45 days for settlement. If it is a very clean conventional mortgage with 20% down you may be able to have a 30 day closing. But be mindful that you must fully cooperate with the mortgage company and get them all the documentation and information they request and you must get it to them immediately to avoid a delay in settlement.
Contact a direct lender. A direct lender is very important at this time. They will be able to go over your credit and your situation and advise you as to whether or not you qualify for a mortgage. They can also provide you with a pre-approval which is necessary to place an offer on a home. They will be able to tell you what your monthly payment will be and how much you will need to close on the home. A Realtor can also provide you with this information. Remember your monthly payments will include taxes if you choose to escrow them. If you are putting less than 20% down or you are utilizing FHA, VA or USDA financing you will have no choice but to escrow your taxes. Many times when you utilize some of the on line mortgage payment calculators they fail to include them in the monthly payment.
Jennifer Daywalt, Realtor
RE/MAX Results Realty- Collegeville
Licensed in PA
Phoenixville's Home Town Realtor
Top Realtor 2004-2011
www.JenniferDaywalt.remax.com
Author of "Ask The Realtor" for www.PhoenixvillePatch.com
RE Blogger for The Phoenixville Patch
610-489-7355 Main - 610-999-7693 Direct
