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Real Estate News 9/21/20

 With interest rates falling below 3% for the first time in five decades, would-be homebuyers are chomping at the bit to get out there and find new places. But when they finally do jump off the sidelines, they’re likely to find slim pickings. Nationally, according to the National Association of Realtors, inventory was off almost 19% in May. But the Redfin brokerage chain said active listings are down 27% from a year ago in the markets its agents work. And as of mid-July, Realtor.com, NAR’s official listing site, showed inventory down 32% from the same time in 2019. “Homebuyers are frustrated because they’re just not seeing a lot they want to buy,” says Irma Jalifi, a Redfin agent in Houston, who recently had two clients throw up their hands in disgust and stop looking. Chris Ann Cleland with Long and Foster has found the same. “The level of frustration” for buyers in her Virginia market is “through the roof,” she reports. The natural result from all this? Bidding wars, where buyers compete for the few house that are left for sale. “So many buyers for every listing that comes up on the market means that there are often five or more buyers knocking each other out to win the home,” says Cleland. Clever Real Estate, a buyer-agent matching service, says that since the pandemic began, 43% of all buyers have had competition. Of those, 18% had lost out on at least one house before finding another. Now, here are some more tips for buyers looking for a competitive advantage:

  • No strings attached. If cleanliness is next to godliness, then a “clean” offer is godlike in the eyes of sellers. So, remove every contingency you can possibly live without. Conditioning the deal on the sale of your current house, for example, is the kiss of death.
  • You’ll take it. Offer to take the place “as-is.” You can still stipulate that you want the place inspected, and cancel the deal if the exam uncovers something major you find unacceptable. But other than that, once the inspection period expires, you’re all-in.
  • Speed is of the essence. Some sellers want out as soon as humanly possible, so offer to close quickly, perhaps within 24 hours. Of course, that’s not possible; it takes several days to prepare the closing papers. But the offer to settle the next day tells the seller you’re ready to go.
  • Go long. Other sellers might have a much longer time frame in mind. So instead of a quick deal, offer to hold off the closing for 90 days instead of the usual 30 or 45.
  • Add a personal touch. Write a heartfelt letter telling the seller who you are, why you love the property and how you will cherish it as your own. Write it by hand and include a photo of your family. Corny? You bet. But sometimes it works.
  • Pay to play. Offer to pay some of the seller’s moving expenses. If it’s a vacation house, offer to allow the sellers to come back and use their former vacation property at predetermined times every year.
  • Hang tough. If your contract isn’t accepted, ask to remain as a backup in case the other deal falls through. More than 1 in 4 contracts fail to close, so yours could be next in line. Source: The Housing Scene by Lew Sichelman

With 30-year fixed-rate loans at historic lows, the number of people who could both benefit from and likely qualify for a refinance continues to increase. Research by Black Knight says 75% of homeowners with mortgages could benefit from refinancing. Black Knight, a provider of software, data and analytics for residential lending and servicing, says there are now 19.3 million high-quality refinance candidates, the largest this population has ever been, and representing 43% of all 30-year loan-holders. High-quality refinance candidates are defined as those with credit scores 720 and higher. Remove that eligibility criteria and there are 32.4 million, 30-year loan-holders with rates 0.75% or more above the prevailing rate. Black Knight says that represents three out of every four homeowners with a 30-year loan. The savings are fairly significant. Black Knight says the average homeowner would see a reduced payment of $299 monthly, an aggregate of $5.8 billion a month if all refinance candidates were to take advantage of the opportunity. That is the largest aggregate savings ever available through refinance. Black Knight statistics show more than 7 million refi candidates could save at least $300/mo. Nearly 2.5 million could save $500 a month or more. Source: Black Knight 

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