Confused about the housing market this Summer (Vienna: mortgage, credit)

[VRE332]

We've looked 2 SF houses this summer and they both received contracts by other potential buyers on them fairly quickly (2 weeks). My Realtor said that these deals eventually were broken because the potential buyers were unqualified, and now these homes are off the market. I feel like there's a housing demand, but it feels fabricated with unqualified buyers, or sellers whom are not willing to negotiate. Is it just hard for people to get loans? I feel like knocking on the owners door and seeing if they'd like to make a deal. Or it could be that owners are putting their house on the market as a feeler. See I've got the 20% down payment ready, and I am qualified, but my choices are limited because of the swarm of unqualified buyers.

[johnsonkk]

There had to be other reasons that those two you mentioned were pulled off the market after a single offer collapse. Many houses state the overused "back on the market" for the reasons you mention. If I had an offer (that fell through) within two weeks, I'd relist at the same price.

If this was that common in the price ranges that you are looking, then the realtors will push for more pre-qualification buyers before pursuing contracts. However, just like before, most contracts fall through as they did before 2008; regardless if the buyers are pre-approved. Many factors but these days, it can be the added scrutiny of financial 'research' by the mortgage companies offering the loans.

[gammann]

As far as how quick they are getting offers, it all depends on how well the house is priced. Priced correctly, it can go quick.

Agree, there has to be other reasons. Maybe something found in the home inspection, that seller needs to fix, or doesn't want to fix, and the realtor just doesn't want to honestly tell people that? Or asking price was too high to support the appraisal and seller doesn't want to budge.

I don't know why anyone would want to go through all the trouble of putting their house on the market as a feeler. You could easily just look at recent sold data to determine what people are paying for your current house.

I would also think the seller shouldn't be accepting any offers from anybody that doesn't have at least a pre-qual letter. This would be bad advice from their realtor.

When you submit an offer on a house, have your realtor submit a cover letter with it, and highlight your pre-qual/pre-approval (they are different), as well as your intention to put down 20%. That should show the seller that you are serious, and your deal may be better, even if the price is less than someone else with no pre-approval.

[saganista]

Originally Posted by gammann

As far as how quick they are getting offers, it all depends on how well the house is priced. Priced correctly, it can go quick.

If it sells so quickly, it was very likely underpriced and the seller simply gave away some number of thousands of dollars in the deal.

[CAVA1990]

Originally Posted by saganista

If it sells so quickly, it was very likely underpriced and the seller simply gave away some number of thousands of dollars in the deal.

Often due to a pushy listing realtor wanting to make a quick sale. Read the section in Freakonomics about how realtors will generally let their own homes sit on the market for longer than they get their clients to. At 3% there's not much incentive for them to get you $10K more by waiting.

[ViennaSausages]

Originally Posted by CAVA1990

Often due to a pushy listing realtor wanting to make a quick sale. Read the section in Freakonomics about how realtors will generally let their own homes sit on the market for longer than they get their clients to. At 3% there's not much incentive for them to get you $10K more by waiting.

People are still conned into paying 6%? LOL

[CAVA1990]

Originally Posted by ViennaSausages

People are still conned into paying 6%? LOL

That may have been high but it becomes even less attractive for a realtor at a lower rate if you hold out longer. I have no idea what realtors are getting now but I imagine it's around 5%.

[Jayess1]

Originally Posted by VRE332

We've looked 2 SF houses this summer and they both received contracts by other potential buyers on them fairly quickly (2 weeks). My Realtor said that these deals eventually were broken because the potential buyers were unqualified, and now these homes are off the market.

?? An unqualified shopper can't put a contract up - just an offer, which will stand for a short period of time. Did your realtor actually make a good faith offer on your behalf or was this just "watching"?

FWIW, with mortage rules back to where they should've been for the past 15 years, there are (seemingly) plenty of shoppers w/o the wherewithal.
In these two cases, it's simply possible that the accepted offers were the only ones in the seller's price range.

Originally Posted by VRE332

I feel like there's a housing demand, but it feels fabricated with unqualified buyers, or sellers whom are not willing to negotiate.

I'd have to disagree w/your premise. Housing demand (even w/the Fed pump across the Potomac) is down in a variety of markets. Current owners, OTOH, want to either recoup their costs or are still hoping for some significant profit even after short term ownership.

Originally Posted by VRE332

Is it just hard for people to get loans? I feel like knocking on the owners door and seeing if they'd like to make a deal. Or it could be that owners are putting their house on the market as a feeler. See I've got the 20% down payment ready, and I am qualified, but my choices are limited because of the swarm of unqualified buyers.

Again, yes, mortage rules are returning to where they should've been. As to knocking on doors, why not? You're interested in a property, research it a bit (recent transactions, etc.) and go for it.

[saganista]

Originally Posted by Jayess1

FWIW, with mortage rules back to where they should've been for the past 15 years...

Mortgage rules have plainly become too strict. The old saw that risk is undervalued in good times and overvalued in hard times is once again being proven in spades. We are back now to 1950's-ish policies where it may well be that a majority of buyers who could afford to carry a mortgage is being denied one through phony hoops and barriers.

Keep in mind that it wasn't lenders who adhered to established underwriting standards who poisoned the credit market well. It was newcomer cowboy capitalists driven by short-term profit and given free rein by a bunch of laissez-faire regulators and overseers.

[Jayess1]

Originally Posted by saganista

Mortgage rules have plainly become too strict. .

And just as plainly have not. Downpayments should be a rule, not an exception.