I have a few clients who are VERY motivated to take advantage of the low prices, low interest rates, the first time home buyer tax credit and the FHA loan program requiring only 3 1/2% down. With all these positive incentives, what could be the problem?
The problem is that there is very limited inventory at the price level first time home buyers are looking at. Almost all of the inventory is either bank owned or are short sales (more on those in a minute). The bank owned properties are very difficult to get into for first time home buyers for a couple of reasons. The first problem is that the banks are pricing homes very agressively and the prices get bid up well above asking. The second problem is that bank owned properties are sold "as is" meaning they will not do any repairs. This is a huge problem because the FHA loan program will NOT allow the home buyer to pay for ANY repairs even if they want to and the bank does NOT want to pay for any repairs. In the banks' eyes, cash offers are King and tend to win the deal.
What's the solution? Please stay tuned for my next blog, coming soon!
Wednesday, June 10, 2009
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