17. May 2013 11:48
The shortage of inventory in our current market in San Diego County is creating a lot of competition for buyers. One of the strategies to get noticed: buyers are waiving their appraisals. So, as an advantage over other buyers who retain the appraisal contingency, if an offer is made at $500,000 and the seller accepts that, the buyer's lender will order an appraisal to get the loan approval started. If the appraisal comes in below $500,000, the buyer can not negotiate with the seller a price reduction to meet the appraisal amount. This effectively changes the way in which a buyer purchases property. It is limiting. It can work best knowing that the market area in which the property is located is appreciating in value. A buyer who waives the appraisal contingency has an advantage at the start of escrow, but, if there is a shortage between what the sales price is versus the appraisal amount, be prepared to open up your checkbook to make up the difference. Some see this as a small price to pay to get the property you want.
7. February 2012 13:37
I have long maintained that the housing recovery is premised upon the distress inventory clearing out. The distress in foreclosures and short sales is not helped by lenders unwilling to either re-finance or modify loans of qualifying homeowners. If the homeowner can prove income, why shouldn’t the lender re-structure the loan to accommodate a monthly payment that works? It’s a win-win. If my neighbor’s loan was an adjustable rate and re-sets from 5% to 10%, and the payment becomes a tidal wave of debt, a foreclosure might begin. Ultimately, my home’s value will decrease as a result of that neighbor’s distress. President Obama, in his State of The Union speech a few weeks back, said, “I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No red tape.” Clearly, the devil is in the details. A huge impediment to refinancing is the lender’s appraisal. . In the scenario President Obama outlined, appraisals can =not= have any role in the refinancing process other than a place mark in the file. It can not determine value. If the lender needs to restructure or modify an existing loan to reduce the interest rate or extend the years…if they can create a more stable housing environment and avoid millions and billions in write offs and losses….then that would be the recovery we have been pushing for. A 30-year fixed rate mortgage under 4% is available today. Why not get started?