Yes, you can borrow the money. Here's the main issue on that price range. Most people who are buying in that price range are paying cash and the banks would prefer a cash offer over finance because a cash offer can close quickly. The buyer who is getting a loan will more than likely need at least 30 days to close. Hope that helps. Penny
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This can be true for real estate agents as well. Thereâ€™s a lot of liability on the table to make 3% of 30k = $900. Few agents keep 100% of their commission. Most agents have to split the commission with their broker and pay a doc fee ranging from $300 - $500 for each transaction they work. Add gas, car and office maintenance, showing, offer writing and negotiation time and the agent commission is gone. See a recent Trulia post in the link attached for more detail.
I know you mentioned home, but if you are looking at condos, you will get a quick no as well. Have a loan officer explain to you why they would have trouble closing on a condo. Iâ€™m not licensed in loans, but my understanding is condos have too high of delinquency rate so a loan is unsellable or uninsurable in areas with high delinquency rates.
You largest competition for a home in this price range are cash buyers. Typically investors, our market is flooded with them again gaining rents with positive cash flows or flip houses. Cash buyers can close quickly. When a seller is looking at you needing 30 days to close a loan and a cash offer that can close in a week, what looks more appealing?
I would say give it a try. Understand itâ€™s tough out there. Your agent and loan officer may need to charge you more money to cover their liability. If you get upset during the transaction, brainstorm to see what you can do better the next time you offer. Understand the market is moving fast in some areas and slow in others. Firing people because an offer didnâ€™t get accepted may not be their fault. Chances are, itâ€™s the market.
Yet, all hope isn't lost, because you do have other options. For example, you could work with some credit unions, buy with creative financing, or obtain private financing.
It is very difficult to get traditional financing for such a small purchase price. However, you might be able to get a general credit line loan if your strong enough financially or if not a credit line look into a hard money loan. Be aware though that the hard money will cost you a very high interest rate at an amount that low.