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Scarcity of Homes Accessible for Most Buyers

Scarcity of Homes Accessible for Most Buyers


    

Scarcity of Homes Accessible for Most Buyers

by Horace Lenning

The tax credit for homebuyers was just expanded and extended in an attempt to encourage consumers to buy a home now. Many imagine there is a huge supply houses available for sale and all that's missing is the buyers . That's actually not the case. Many would-be homeowners write an offer on a house, only to find that they are not the only one who wants to buy it. That's because there is a sparse selection of properties available to a home buyer who want to buy with a small down payment and questionable credit. The owner's situation determines the sort of consumer they can accept.

Properties Owned by Banks

A huge inventory of homes owned by mortgage companies is available now, and their number will only grow in the months to come.

banks want to sell homes promptly once they've finally completed the prolonged foreclosure process, obtained clear title and moved any residents out. They offer it at or below market value and accept an offer that will close quickly, even if it's not at the top price. Consequently that buyers who can pay cash, or at least have a large down payment and preapproval, get the house. These are usually investors.

Foreclosure Avoidance Sales

Many homeowners who can't sell their properties for more than they owe on them try to save their credit with a short sale. This sort of sale must have the approval of the lender which is going to forgive a portion of the loan. Lenders, however, are not anxious to do this. It often takes months and months to get approval - if ever. Those who can afford to wait and don't mind the uncertainty of not knowing whether they'll get the house usually make low offers on short sales. Investors are much more likely to accept such a scenario than are people who need to find a home to live in.

Brand New Construction

Home builders aren't making as many new houses as they once were. They are able to hold off and wait to develop their land when prices appear to be on the rise. But they are building and selling some homes, and these are a great option for would be homeowners.

Equity Sales

If a homeowner has equity in his home, they often choose to wait. They recognize that home values have fallen a lot since the peak of a few years ago. They look forward to prices rising again after the market hits bottom and all the distressed sales have worked their way through the system. A few understand that it's a good time to move up - if they have steady jobs and can qualify for a mortgage. They'll come out ahead because values of more expensive properties have declined more than values of less expensive homes There are also those few who have to sell due to a relocation.

Homes That Typical Home Buyers Can Get

A good number of people buying a home to live in need to put together a down payment and get a home loan.This is time consuming, and occasionally deals fall out of escrow. Recent alterations of appraisal rules have made things worse. Mortgage companies will only loan up to 80%, 90% or 96.5% of the appraised value, and lately appraisals have been coming in lower than the agreed price. Many distressed owners don't have the opportunity to wait for a buyer to go through this process, especially when it's a real possibility that the sale won't close in the end. As a result, they're accepting offers from cash buyers. Some sellers take an extended period of time to get bank approval for a sale. This doesn't work well for a buyer who needs a place to live. This leaves the few equity listings and new construction as the only reasonable choices.

What Markets Are Most Affected

The most impacted real estate markets are those that had inflated home prices before everything went south, including houses in Phoenix or Albuquerque, new homes in Chula Vista, and any homes in areas where sub-prime loans were widespread. Anyone trying to buy new homes in San Diego, Los Angeles or Riverside will learn shortly that California is one of the hardest hit markets. It was also one of those most in need of a return to reasonable prices.

About the Author:
Written by Horace Lenning motorcycle insurance comparison


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