What buyers are buying in Real Estate

Good Afternoon,

I hope February was a solid month for you. It is an interesting time in our industry as this is traditionally the “slow time of year.” However with the Homebuyer’s Tax Credit expiring at the end of April (a buyer must be in a binding contract), many first time home buyers are out in the market place buying homes! According to NAR, first time buyers account for 51% of the home purchased last month and 33% of the homes they purchased were distressed properties. What can we do to take advantage of this trend?

The first is help get the word out. Johnny Isakson who championed both Tax Credits emphasized before the passage of this credit that: “Extending it is important, as long as everybody still understands permanent extension would be bad.”1 We need to let buyers know that if they wait until the summer they will be missing out on $8,000.00! Once we get their attention, how do we get them in a home? FHA, FHA, FHA!

Personally, 95% of my first time buyers are utilizing this program to buy their first home. The underwriting guidelines are very flexible; the minimum credit score is only 620 and we can have the seller pay all the closing costs. So most my first time buyers pay only their down payment of 3.5% at closing and they are in their new home. We underwrite this loan and all our loans in house. This gives you a huge advantage in negotiations because we can close an FHA loan in two weeks with no problems. All our appraisers are local; we do not use national appraisal companies. If you are in a multi-offer situation, putting a short closing date will give you the advantage. We are also offering the FHA 203K loan. This loan allows a buyer to complete up to $30,000 of approved renovations to their purchase. This is a perfect loan for these REO properties. What you need to know here is the turn time is much slower. We need 60 days for closing on a 203K loan. But, where else can a buyer get $30,000.00 for renovations with only 3.5% down?

I hope these ideas and strategies help you generate more sales over the next 8 weeks. Please let me know if I can help in anyway.

Take care,
Damian
770-512-3420

Source
1. http://isakson.senate.gov/floor/2009/110409hbtc.htm