Jim Valentine: Getting noticed in the market


In a dynamic market everybody wants to be noticed. Sellers have it pretty easy in these times since their home will surely be looked at when it hits the Multiple Listing Service (MLS) system. The demand is so good that Agents and Buyers are aggressively looking at the market multiple times a day seeking new listings. Buyers, on the other hand, have a lot of competition each with its own characteristics.
Cash buyers like to feel the power of their cash buying power. It can take them some time to realize that in this market a good deal for a cash buyer is the one you can buy, not steal. Your cash gives you the power to be the selected buyer of a home that has multiple offers, but it rarely gives you the opportunity to get a cash discount. This is a by-product of this type of market.
Buyers that need to get a loan come in a variety of packages. There is the veteran that can buy with zero down with their VA loan and can generate a sympathy consideration for his/her offer thanks to their service to our country. VA loans used to have a lot of costs that were mandated to be paid by the seller such that sellers didn’t like to accept offers if the Buyer was getting a VA loan. Those days are gone. The only mandated cost today is that the Seller pay for the Pest Inspection, about a $125 cost. There are, however, some requirements including the condition of the house and a water quality test must be taken if it is on a well. With a $0 down VA loan the appraisal must come in at the agreed on sales price which can be hard in this day of rising prices.
The very popular FHA loan requires 3.5% down creating the same circumstance as the VA loan when it comes to appraised value in a rising market. Like any loan, the FHA will cash out the Seller at the close of escrow, but there is the uncertainty of the Buyer qualifying and the house qualifying (appraising). A good Lender will take care of the Buyer up front which should be fine barring any surprises unknown to the Buyer.
A conventional loan has more leniency when it comes to qualifying, but the file still gets a lot of scrutiny. Many convention borrowers put 20%, or more, down to save the cost of the Mortgage Insurance. That can be costly. VA loans are guaranteed with the Buyer paying a one-time fee, FHA loans are insured with an insurance premium being paid along the way until the loan to value is 80%, or less.
You can stand out from the crowd by writing the strongest offer you can justify to yourself, not only financially but emotionally as well. Make the offer really clean by minimizing the contingencies…



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