Don't Be Afraid of Your Home Loan

 

It is not uncommon for consumers AND real estate professionals to cringe when they hear certain loan types mentioned. A wall goes up and negotiations and business relationships fizzle.

FHA. USDA. VA. 

Listen up. Don't be afraid.

It is important for everyone involved in a real estate transaction to understand that with ANY loan, there are guidelines, rules, criteria, and maybe just as important there are many misconceptions.

With inventory still low at the beginning of 2021's first quarter, buyers will want to make sure sellers are comfortable with their offer. The last thing you want is a seller or their Realtor taking your offer and immediately putting it in the "runner-up" pile when there are multiple offers.

I was successful in getting all of the USDA, VA and FHA deals for my Buyers AND Sellers to settlement in 2020 and the beginning of 2021. 

I often have fellow Realtors, friends,  enemies (ha!) ask me:  "Why did the seller accept your offer? Your client has a VA Loan"? Or, "I don't get it, your listing sold and the buyer used a USDA loan?"

With every real estate deal there is risk. An offer with cash, no inspections, settlement in 14 days can go south very quickly. 

Being informed and honest with everyone generally takes the "scare-factor" out of the loans mentioned above.

What's the trick? Communication and education. To go over all of the details isn't practical in a blog post. As a consumer you want to make sure to speak to your Realtor. Make sure they are informed, and maybe just as important --- not AFRAID. If you are a Realtor and think this is silly. Call me. Unless you " ...  don't need no education ... ".

Why Is The Market So Hot?

If you are looking for a home, you may be experiencing what we commonly see in 717 area code for short stretches. A couple of weeks. Maybe 30 days.

The difference now is we have had the pedal to the metal since mid-May. Why? If you read news reports --- the answer is that the interest rates are low. It is true that low interest rates can prompt an uptick in the amount of buyers. However --- I feel the real reason is simply low inventory.

A case could be made that more buyers than homes for sale *because* of the interest rates. Again - it's part of the equation. The real answer (my opinion) is even simpler. People like living here. They like their community. So much that a number of us just aren't moving. 

Let's face it, we have had low interest rates for a long time. Polling my recent clients, some repeat reasons for moving included down-sizing, getting married (or the opposite), and job relocation to the Harrisburg area. Not one client I asked mentioned low interest rates as a reason they chose to pack up and move. When I brought it up they didn't really think it was a factor. What is a factor (though they may not have realized it) is that their buying power increased with low rates. Sort of. Values are up, and competition is strong.

Why should you care about this? Move when you want to. When the time is right. You want to live next to the creek. Great, make a move! Kids left home and you only need a condo or small home. Let's talk!

Something else to consider is many of us (not me!) spent so much time at home this summer, we realized we want to live in another house. Or maybe we finally fixed it up. We had time to *think* about moving down the road, up on the hill, or over by the lake. This may be a very big factor. But still --- people are moving within our community. There isn't a mass exodus across the PA border. Some, but not alarming.

Why is the market hot? Because you are comfortable here. What's that, you want to move to Hawaii? Forget everything I said. Let's talk this week :-)

Many Buyers Are Ready NOW

I submitted an offer for a buyer yesterday. There were 26 competing offers. The price of the home was ~$200,000.

I have been doing this 17+ years and I can't remember that many offers on a home, other than maybe a seriously discounted fixer-upper or a bank-owned property.

How long will this last? I can't say for sure, but I predict a consistent market through August and if rates stay low and our state's health remains manageable, I don't see an end in sight. This doesn't mean there will be 26 offers on every home, and it doesn't suggest a buyer has little chance of securing a property. Be prepared and you will succeed.

This also doesn't indicate you can put a for sale sign on a home that isn't ready for the market (staging, landscape, etc ..) and expect to get the terms your neighbor will, if they do some basic things - as recommended by a Realtor they trust.

When should you buy or sell? My answer is still the same, after all these years. When *you* are ready.

Great related article: https://www.parealtors.org/some-buyers-ready-to-buy-now-thanks-to-covid-19/