Pinetop White Mountain Blog

Good Afternoon Everyone,

I thought I would address something this afternoon that every agent and every seller is dealing with in today's marketplace.  It is the "Pain" of having a buyer who is getting financing for the sale.  There is money out there for those buyers, but the sellers are being forced to make major concessions in order to get the buyer through the lending process.

Let me begin by assuring you that the Buyers really do want to buy your property.  If they have submitted an offer to you they are ready, willing and able Buyers.  However, those same buyers are up against some pretty serious obstacles with their lending institutions.  They are being forced by their lenders to put a lot of pressure on you to contribute to the costs associated with the loan.  In our area, the majority of our sales right now are the low to mid-range properties.  They are being purchased by First Time Homebuyers who are looking to get in while the prices are where they can afford them.  Most are having to acquire FHA Loans and there are a lot more hoops for everyone to jump through to get government backed funding.   

This may be new to some of you because we haven't seen FHA and VA loans as the prevalent form of financing in many years.  FHA loans have always been more difficult than conventional loans and while some of the FHA regulations on the structure itself have eased a bit, this type of loan is tough to get through.  The costs associated with these loans are much higher, and for most buyers that means they have no choice but to ask you to help them cover those costs at closing.   No one likes the situation but in order to sell properties we all must adapt to the "new age" in Real Estate and sometimes that adaptation is painful. 

In the past, when FHA or VA loans were used it was sometimes possible to raise the price of the property enough to offset some of the costs associated with the loan for the seller.  Unfortunately in today's market that is not the case.  In many cases the values are so tight in an area that there isn't any room to raise the price and it will show up when the appraisal is done.  We are seeing more and more cases where the homes won't appraise for the original agreed upon price, let alone the higher amounts.  The lenders are being very strict about appraisals  and even if they get an appraisal for the final agreed upon price, they are often asking for one or two more "desk" appraisals just to assure themselves that the home really is worth the amount on the Purchase Contract and that they are not lending to much on the property.  

Many markets around the Country are in what is being referred to as "declining markets".  Much of Arizona is included in that group.  That even makes things a little harder because in some cases the lenders are asking the appraisers to value the house according to the comparative properties and then subtract a small percentage to offset future potential losses.  Is it right? Is it fair? Probably not, but because the lending institutions are in such a mess due to their own lax lending practices of the past, today's sellers and buyers are paying the price.

My purpose in posting this commentary today is to help you understand that no one wants things to be this way.  Of course the buyer wants the best deal they can get, but they are not intentionally "beating you up" to get that deal.  Their agent is only doing what the lender has told them they need to do in order to make the sale happen.  You are going to be disappointed in the offers you see, you are not going to like the terms, and you probably are not going to net as much on the sale as you would like.  But, if you need to sell your property and you want the sale to happen, you will have to accept those less than ideal conditions because the lender controls the money.  If you don't agree to the terms that the lender wants, you will not sell your property.  It is as simple as that. 

I have seen many sellers who's first reaction is to reject the offer outright because they don't like the terms on the contract.  But, you must keep in mind that turning down an offer from a buyer who wants your property may not be the best course of action for you.  The next offer may be a long time in coming and it is very likely that the terms on the next offer are going to be similar, and perhaps not as favorable, as the one you already have in front of you.  You may not like it, but in this market the old saying "A Bird in the Hand" etc. really holds true.  If you can get past the initial reaction of anger and frustration and work through the details with your agent, it is very possible that you can pull the sale together to the satisfaction of all parties including the lender. 

We would all like to have sales that are easy and sail right through with a minimal of fuss.  Unfortunately in today's market those deals are the exception rather than the rule.  We all have to work harder and be more flexible than we have had to be in the past.  I am sorry to say that the "Good Ol' Days" are long gone and today's market is much tougher on everyone.  We are all having to learn the "new way" of doing business in the Real Estate World.

If we can answer any questions for you or assist you in any way with your next Real Estate transaction, please feel free to give us a call.  We stand by our motto:  "WE WORK FOR YOU"!

Have a wonderful evening and we look forward to hearing from you soon.

SANDRA & BRUCE PAULOW, Your High Country REALTORS®

(928) 242-0300 or email us at: sbpaulow@frontiernet.net