Now You Decide To Buy - What About Financing?

Cash buyers are prevailing in this market and sellers pay close attention to no-financing contingencies! Over 65% of transactions closed to date in 2011 were cash transactions. Lenders have tightened up their mortgage policies demanding higher down payments and stricter qualifying for even to most credit-worthy buyers.

As a matter of fact, through all of 2010, 3 of the major lenders provided over 1/2 of all US mortgages, according to the fourth quarter 2010 Mortgage Lender Ranking from MortgageDaily.com. Wells Fargo, Bank of America and Chase originated 56% of last year's business. The number of FHA-backed loans also rose from around 19.1% in 2009 to 19.8% in 2010. US lenders closed on about $1.530 trillion in 2010, down from $1.970 trillion in 2009. Well's Fargo remained #1 with $387 million.

If you are considering a purchase and require financing, be sure to check our resources. For Mortgage Info, click here. Or talk with us about lenders who understand this market and what it will take to get your financing accomplished.

ALL CASH? Welcome To The Investor Squeeze

The real estate down turn has leveled off and investors like R. Donahue Peebles, who sold properties as the slide began, are bringing their cash back to the real estate market. Between the exceptional prices and tax breaks, this buyer's market finds great opportunities for the savvy investor who happens to be flush with cash.

So, what does this do to the average house-hunter needing a financing contingency? When you work with The PURTEE Team, you will hear a phrase we say often, "Price or Terms". This basically means the stronger the terms, the lower the acceptance price will be. In the current market, both average buyers and investors are out in the market searching for the deeply discounted deals. However, when they come head to head in an offer for the same property, most often cash will prevail.

According to National Association of Realtors researcher Jed Smith, “Even though a first-time buyer may be offering the same price as an investor, or a higher price, the investor has the edge. The investor may actually pay less, but it’s cash, right now.” We are seeing it with our own buyers and sellers. A cash transaction can eliminate things like a lender requiring approval of a condo building or an appraisal coming in too low. This makes it very tempting for the seller.

The cash sale trend continued in January when 52% of all closed transactions in Pinellas County were paid for in cash rather than through other financing means. This investor squeeze has our attention as we continue to research financing options that can make a difference when presenting a buyer's offer. It is more important than ever for a potential buyer to meet with a lender prior to starting his/her real estate search. A pre-approval letter from a lender can go a long way toward balancing the playing field.