June 6, 2008 11:51 AM
Many home buyers can't get closure
More than a quarter of home buyers failed to close on the house they had under contract during May - twice as high as two years ago.
John Rebchook reports:
The 25.81 percent "fallout rate is staggering," said Larry McGee, president of the Berkshire Group, who for the first time analyzed that aspect of the market.He found that the rate of homes not closing is twice what it was in May 2006, when the rate stood at 13.81 percent, and 46 percent higher than the 17.68 percent rate in May 2007.
However, it is not the worst rate. In September 2007, the fallout stood at just above 40 percent and actually has declined slightly from March and April.
"It will improve," McGee said, as "consumer confidence strengthens."
"This level of fallout produces a considerable strain on both buying and selling consumers, Realtors, lenders, and the entire resale service industry," he said.
Independent broker Gary Bauer, who also prepares a monthly report based on Metrolist data, said deals that aren't consummated fall into three camps: buyer remorse, homes not passing inspection and buyers not qualifying for loans under the stricter underwriting standards.
Buyers often ask for repairs or improvements that the seller considers unreasonable or too costly, McGee said.
"The average buyer, smelling blood in the water, feels that the average seller is desperate to sell," McGee said.
Sellers are having trouble unloading homes at a time when the record number of foreclosures on the market are driving down the median and average prices.
June 6, 2008
12:26 PM
Hogar De Vuelta (العودة) "Ask not what your country can do for you...." writes:
Tree,
I am ready to dip in again for tuition costs. When do you think would be a good time in the next 6 months to do a refi?
June 6, 2008
12:45 PM
Anon writes:
Home refinancing is nothing more than a massive conspiracy and gimmick by the libs who are trying to control the wealth of this nation.
June 6, 2008
12:50 PM
Anonymous writes:
Hogar I got locked in at 5% on a 30 yr fixed in March, but I just happen to call at the right time of day when the feds made that announcment before changing their minds at the end of the day, was pretty cool!
June 6, 2008
1:43 PM
Hogar De Vuelta (العودة) "Ask not what your country can do for you...." writes:
Anon,
Now that would have been a good time to refi. Congrats.
June 6, 2008
2:12 PM
JustSayin' writes:
Isn't this a good thing? Make sure the people can actually qualify and pay off the loan? Of course the rate is higher than May of 2006/07 - back then any deadbeat with a pulse (and some without) were getting loans. And we've seen how that's turned out.
June 6, 2008
2:16 PM
JustSayin writes:
Isn't this a good thing? Make sure the people can actually qualify and pay off the loan? Of course the rate is higher than May of 2006/07 - back then any deadbeat with a pulse (and some without) were getting loans. And we've seen how that's turned out.
June 6, 2008
2:22 PM
back again writes:
Ah, now I see the secret of double posts - a server that takes three/four minutes to respond to a 'submit'. Great going with the high tech, RMN.....
June 6, 2008
2:36 PM
Hogar De Vuelta (العودة) "Ask not what your country can do for you...." writes:
BA,
I can go on a website, shop, and pay for it before I can do one post on the RMN site. With every change, the process gets slower and slower. I just open a new window for each thread and move from window to window, while the snails at the RMN chew on my latest post.
June 6, 2008
5:31 PM
Tree writes:
Hogar,
I was out all day. I'm not paying attention to rates but my buddy in the mortg. bidness is, as that's his job. I did an appraisal for one of his clients back in Jan. and they sat on it until last week to refinance the guy as they waited for rates to go down- so that's your answer. Git r done. I had to do a new appraisal for the transaction, they expire after 4 months and then become toilet paper.
June 6, 2008
5:33 PM
jay writes:
i'm with you guys. RTL needs to fire whomever is handling their website technology.
fired and flogged.
absolutely, laughably horrible.
June 7, 2008
5:44 AM
Works with Realtors writes:
"Buyers often ask for repairs or improvements that the seller considers unreasonable or too costly, McGee said.
"The average buyer, smelling blood in the water, feels that the average seller is desperate to sell," McGee said.
Sellers are having trouble unloading homes at a time when the record number of foreclosures on the market are driving down the median and average prices."
Big problem with most sellers is that they have not maintained their homes. Lots of homes need new windows and roof repair because of harsh winters. Most also need new exterior painting. Average repair cost 7-10k
Sellers who are under water with no equity have no way to finance this repair. Buyers usually want a home in move in condition. Any realtor will tell you if you are serious about selling your home better be the nicest looking one in the neighborhood because you are also competing with a new built home too.
Even so, the majority of homes falling out of escrow do so because Buyers don't qualify or the home doesn't pass inspection.
June 7, 2008
8:50 AM
Its Predictable Economics writes:
When you buy more house than you can afford, you will eventually lose it. When you commit to a mortgage without a stable cash flow and a sufficient down payment, you will eventually lose your home.
Idiots like Ed McMahon and Evander Holyfield are not anomalies. They simply illustrate the phenomenon on a grander scale.
Too bad Democrats threatened to sue lenders 10 or 15 years ago for not floating high risk loans in high risk neighborhoods to high risk home buyers. This crisis stems DIRECTLY from that PC pressure on financial institutions.
The chickens are home to roost. Why will no PC Congressperson who threatened discrimination lawsuits in the past stand up and share any responsibility for this mess?
June 7, 2008
8:59 AM
Mayday writes:
JustSayin' writes:
"Isn't this a good thing? Make sure the people can actually qualify and pay off the loan? "
You're obviously new here, that would be racist, sexist, classist or some other 'ist behavior.