Should Buying A Home Be This Hard?by Tim Manni
We’ve consistently noted that perhaps the largest hurdle facing borrowers in this current real estate market is securing financing. Mortgage rates have been historically low for almost a year now, real estate prices are nearing a bottom (if they haven’t reached one already), and incentives like tax credits have been extended and expanded to lure potential buyers to the market. However, credit conditions remain extremely tight. With all that being said, one could speculate that as soon as you secure financing, the home-buying process should be smooth sailing, right? Well, not for one couple.
Our friend Jamie Smith Hopkins at the Baltimore Sun is running an interesting series in her blog, “The Real Estate Wonk,” on first-hand experiences from the home front. “Dispatches from the home-buying front” details the experiences of one couple from the Maryland area who are in the market to purchase a home in today’s unique marketplace.
In part one of “Dispatches,” the couple, Peter and Karen, detail their time spent browsing and placing offers on a variety of properties:
The process seemed straightforward enough. Find a lender. Get prequalified/preapproved. Find an agent. Sift through listings. Look at houses. Make an offer. Inspect it. Get the loan. Close. Move in.
It was surprisingly difficult to get a lender to return our calls. Finally, one called back, reviewed our finances and came back with a number…
Due to their price range, the couple found themselves looking at several distressed properties. The first two foreclosed properties they looked at were not what they had in mind. One was infested with bugs, and the other was located in a bad neighborhood. The next home the couple looked at was a short sale:
Short sales were a completely different monster. It was awkward. It was weird. We felt like we were walking into these houses and saying to the owners, “Hi, we’re here to buy this house for WAY less than you paid. We’re going to undercut you because we know you can’t afford this house. Tough luck.”
As we looked over the house, the family sat there and ate lunch and watched TV, occasionally giving us dirty looks. OK, maybe I imagined the dirty looks, but it was very uncomfortable.
The price was right, but the short sale aspect wouldn’t work out, we thought. It would take too long and we’d never know when the bank would make a decision.
Time after time the couple made offers (usually thousands above the asking price) only to have them rejected. Obviously this story only documents the experience of one couple and can’t speak for all buyers, but it’s really quite interesting as it details what buyers are up against in today’s market.
The Wonk will release ‘Dispatch No. 2′ later today — stay tuned.
Click here to read part one of “Dispatches from the home-buying front.”