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October 12th, 2009 8:35 AM by David W. Welch
"I feel a blog coming on." That is what I told a customer of mine a couple of days ago as she and I went out again to look at some new listings that had come on the market. She put an offer on a Fannie Mae property on September 7th, Labor Day and today is October 12, Columbus Day. We have no answer, just that they are really busy and have not had a chance to get around to looking at the multiple offers on the property. Just in case you don't have your calendars out that is five weeks with no response from Fannie Mae. On top of the wait, is my concern that they may not accept her offer because it is contingent on Neighborhood Stabilization Program down payment assistance. She has already qualified for this assitance and the property is in the target area, so it is a done deal. Unfortunately, nobody seems to know what the NSP is. It is a part of the stimulus package that nobody seems to know about. In Orange county this money is being used for down payment assistance in specific target zip codes. If you have a question about it contact David Holbrook at Waterstone Mortgage at 321-945-1434.
Then I see this article in the Orlando Sentinel yesterday http://www.orlandosentinel.com/business/orl-first-time-home-tax-credit-101109,0,3568996.story. This reminded me to blog about what we are seeing here in Orlando. Since April we have been writing more than 3,400 contracts a month, not offers but contracts, but the most we have been able to close in a month is around 2,200. Demand for homes is fantastic, but actually being able to negotiate a contract is a challenge and closing the deal is almost as tough. If my experience is typical in the market, I would say the average buyer is writing a minimum of five to six offers and I have heard of people making more than a dozen to finally get a property under contract. That is just a result of the demand for properties. The greater frustration is that you wait for days and even weeks to find out that your offer has not been accepted by the bank. It is much easier to put a contract on a short sale, because they tend to be the last resort for some buyers. With only 10% of the pending short sales closing in any given month there is a lengthy wait and uncertainty if the deal will close at all.
Once you clear the hurdle of going from offer to contract there is still the financing contingency to clear. I have read that up to 1/3 of mortgages are being denied. A year after the financial meltdown and it is still difficult to obtain financing for a lot of potential buyers. The government has responded with appraisal guidelines that have made the process more convoluded and lengthy and new disclosure requirements that help nobody. In stead of changing the rules every month why not just return to basic lending principles, and make loans for borrowers who qualify.
I really do not believe we need an extension of the tax credit from a fiscal perspective or as a demand stimulus. I feel badly for the people who will not get to take advantage of this program. I feel even more badly for the people who have tried, but were unsucessful because the banks and Feds just do not have their acts together. Most first time buyers in our market are looking forward to the tax credit, but the low prices and super low interest rates are the big factors in making the homes affordable and driving demand. There are fantastic buying opportunities, great prices and low interest rates. Keep a stiff upper lip, and keep writing offers.
Orlando Real Estate, David Welch Real Estate Optimist