Lew Sichelman
If you are an active buyer or seller planning to travel over the holidays – or anytime, for that matter – make sure your agent can still reach you. If you can’t be found, you could lose your deal.
Just ask Andrea Bedard, an agent in Silver Spring, Maryland. She couldn’t get in touch with a seller while he was traveling, and he failed to initial a key contract clause within the allotted time frame.
“Thankfully, the buyer wanted the house, and was understanding,” she said in a post on the real estate site ActiveRain. But folks “can’t take this kind of a response for granted.”
Indeed, an offer can easily disappear if a seller isn’t around to accept or counter it. If you are totally out-of-pocket for days at a time, your wannabe buyer might just move on.
And if you’re a buyer who can’t be located, another buyer can swoop in and take the house right out from under you.
“Time,” said agent Amanda Davidson in Alexandria, Virginia, “opens the opportunity for another buyer to tour the home and write an offer.”
Agent Dorie Dillard in Austin, Texas, agreed.
“Time is of the essence,” she said. “Until all the initials and documents are obtained and the contract is dated, you don’t have a binding contract.”
So, let your agent know how to get in touch – and your lender, too. Gene Mundt, a loan broker in New Lenox, Illinois, said many applicants seem to go MIA these days during the approval process. Whether for business, pleasure or even illness, he said, taking yourself out of action “can definitely put a kink in the mortgage process.”
Big Homebuilders Keep Growing
The big keep getting bigger.
According to the trade journal BUILDER, the nation’s 20 largest builders constructed 29 percent of all new houses in 2018. That’s up significantly from 26.8 percent the year before.
Twenty years ago, these national and regional giants produced just 16.6 percent of all the new houses.
These behemoths, which are able to leverage their size to access credit directly from Wall Street and achieve economies of scale in purchasing building materials, have been growing by moving into smaller markets, often by buying their smaller-scale competitors and their land. Last month, for example, Taylor Morrison Home Corp. agreed to buy William Lyon Homes, making the resulting entity the fifth-largest homebuilder in the land.
Foreclosure Not the Final Word
There’s no question a foreclosure can be devastating. But it doesn’t stay on your credit record forever, and it doesn’t mean you’ll never be able to own a home again.
Credit scores can decline by 150 points or more when a lender forecloses, according to an analysis by LendingTree. But the event falls away after seven years, and many buyers maintain a relatively high score regardless of their housing woes.
More than 30 percent of those with a foreclosure in their files have a score of 640 or better within a year of foreclosure, LendingTree found. That’s more than enough to qualify for a mortgage. Moreover, credit scores tend to increase by about 10 points each year after foreclosure.
Down Payment Help Critical
Time and again, this column has addressed the importance of down payment assistance (DPA), which is accepted in one form or another by most lenders. Now comes a survey that finds 9 out of 10 homebuyers who used the help would not have been able to purchase their homes without it.
The poll by the CBC Mortgage Agency in Cedar City, Utah, found that for many single-parent buyers, acquiring a home would have been impossible without assistance.
“The findings are compelling,” said CBC President Richard Ferguson. “Without DPA, millions of Americans would be shut out of the homebuying market.”
According to Down Payment Resource, an information clearinghouse, there are more than 2,500 active DPA programs nationally. They are offered through state and local housing finance agencies like CBC, nonprofits, city and county administrators and even some employers.
Most programs take one of several forms: grants that need not be paid back; low- or no-cost second mortgages; affordable first mortgages; and mortgage credit certificates, which provide tax benefits to help offset mortgage interest costs. Sometimes assistance programs can be combined or used in conjunction with low-down-payment, high-debt-to-income ratio loans.
Pessimism About Dreams
Zumper, an apartment search engine, said its latest survey found that 1 in 3 apartment-dwellers do not believe the American Dream involves homeownership, and 1 in 5 say they never want to buy a house.
Furthermore, the percentage of respondents who plan to take the plunge within the next two years has declined from 44 percent last year to 30 percent this year.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at lsichelman@aol.com.
