Home Buying in Silver Spring>Question Details

Donna Kerr, Real Estate Pro in Silver Spring, MD

Are buyers concerned there is not enough inventory out there?

Asked by Donna Kerr, Silver Spring, MD Sat Jan 26, 2013

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Greg Myers’ answer
Donna,

My feeling on the financing contingency is it should never be "Waived". If the buyers abiltiy ability to purchase is dependent on a mortgage then there is a financing contingency whether it is contained in the contract or not. The morgage lender will certain proceed using the same lending standards and procedures as if the contract does contain a financing contingency.

Our responsibilty to the buyer is protecting the buyers earnest money deposit and not placing the deposit.... contractually at risk.

If something or anything goes wrong in the tranaction process and the earnest money deposit
is at risk the buyers...WILL BE STARRING AT YOU. Don't put yourself in that position.

Greg
1 vote Thank Flag Link Sat Jan 26, 2013
Hi Donna,

I am sure certain buyers are concerned there is little available inventory in a lot desired areas in the Washington DC Metro area.
0 votes Thank Flag Link Sat Jan 26, 2013
Great question.....

Not at all.....they are only hearing rumors and are still operating on the fact that real estate is a "fire sale." Banks are giving property away and sellers are desperate. The real condition of the real estate market will not kick in until the media begins to pump the air ways with information that is passe.

Spread the word....I am....

Bill
0 votes Thank Flag Link Sat Jan 26, 2013
I'm not a Realtor rather a lender but from our side we see clients as Greg said writing several times before "winning" the home. We try and tell the clients, especially if they are new to the area or first time buyers that asking for closing help is pretty much a thing of the past and to strongly consider escalation clauses. I show them how 5 or 10k over 30 years barely moves the needle on their monthly payments. I personally have seen clients not "get it" until they lose a few and then change their thinking a bit.This is happening in ALL prices ranges in DC, MD,VA as far as I can tell. I have to agree with FHA financing being a negative sign. Not that there aren't strong buyers with FHA there are. Generally though we try and get them off FHA because with even 5% down conventional the monthly payment is VASTLY lower. When they see that they get it. FHA is used more now for the grant programs, which are much slower to use, lower credit scores, which should be a red flag and higher ratios. Right now though I have EXTREMELY strong buyers choosing to go FHA just because they are nervous about putting down 5% which they could easily do. VA is actually really easy and flexible to work with now from a lending standpoint. It's the easiest loan to get, please don't reject those VA offers!! :) It's true if the home is a bit rough THEN VA can be a pain. It's still usually minor VA repairs, usually with wood and paint, such as the trim or a board on a deck. I think VA becomes a problem when the LO doesn't work with VA very often and doesn't know the quirks of the program. I have worked with VA 10 years and have little issue getting the loans approved. It's the same thing, you need a lender who knows the VA program and what it can and can't do. Anyway, thanks for letting me put my two cents in. Hope it helped.

Thanks,

Brent Mendelson
Senior Loan Officer
1ST Mariner Mortgage
O-240-235-5314
C-301-412-0259
F-240-235-8236
Bmendelson@1stMarinerbank.com
Lending in all 50 states
nmls#111407
0 votes Thank Flag Link Sat Jan 26, 2013
Buyers definitely should be concerned. Even in 2012, I saw multiple offers on 30% of my transactions. As a listing agent, I look forward to the competition but always feel bad for the buyers who lose out. As Greg said, FHA and VA buyers are at a distinct disadvantage when competing with conventional home buyers. They really need to be evening the playing field by doing pre-presentation home inspections to eliminate the home inspection contingency and be willing to waive the financing contingency if they are a sure bet. I find that most home buyers feel ok with waiving financing if the appraisal contingency is left in place. They have even waived appraisal as well if they have enough cash to make up the difference.
0 votes Thank Flag Link Sat Jan 26, 2013
If buyers are not concerned they should be, mutilple offers are the norm for any home worth buying under $350,000 that shows well and is of course well priced. Once the traditional April through June spring market starts it is going to resemble 2002-2005 time frame of mutiple offers on eavery home.

The coventioanl loan home buyers will have an advantage in competing offers but i forsee the FHA and VA home buyers due do condition and appraisal contingencys should be prepared for writing mutiple offers before "Winning" a home. Many home buyers will have to compete again for a future listing is a given area along with the same buyers.

Greg Myers
RE/MAX Realty Group
0 votes Thank Flag Link Sat Jan 26, 2013
They are concerned I think, but they are still particular about the house. A crowd will chase after the same home because it has the charm factor + the right staging and updates. Others are passed over and still sit on the market for weeks, sometimes months due to poor presentation, over pricing, or bad condition. Concerned buyers should give this old inventory another look and use their imagination. I think the lack of reasonably priced good inventory makes buyers constantly watch for new listings online, and they are emailing their agent's on new homes rather than the other way around! It gets hard for them to understand some things reported as available are not, for various reasons.
0 votes Thank Flag Link Sat Jan 26, 2013
Hello Donna . While there has not been any formal announcement from the real estate industry or your local news, buyers that are currently looking for homes are experiencing it first hand. We are seeing multiple offers now on virtually any property that is in "good condition". Supply is getting low and demand is getting high. I just put a home on the short sale on the market 2 days ago and I have received 7 offers. One realtor had a blank contract with her on their showing and wrote the contract at my clients dining room table. It's getting very competitive now. Now is the time to buy! Good question. Call me if you need further assistance.
0 votes Thank Flag Link Sat Jan 26, 2013
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