There are a lot of investors out in the current real estate market snapping up properties that are placed for sale. The Santa Clarita Real Estate sellers find it hard to resist their cash terms.
In comparison with any other types of buyers – the Conventional 20% or more down, there is still the necessity for appraisal and a loan to have to be worked out. There is still a level of review and there is still not a 100% chance of it closing in accordance with the Sellers Wishes.
The less than 20% down buyer. This one may be anywhere between 3 and 15% down. The lower the down on this type of conventional loan the better the borrowers credit profile has to be. There is PMI attached, Property Mortgage Insurance, with each of these, less than 20% down loans, there is still the need for the appraisal and even more levels of review. Compared to Cash and the “no appraisal” issue that most investors employ – these are less attractive to sellers.
We then have the FHA/VA buyer. Time Frames on both of these loan types, with rigid appraisal guidelines, can cause sellers to totally dismiss anyone offering on a home with FHA or VA financing. This is especially true when competing with a cash buyer. Most cash buyers don’t care about about appraised value and because they usually have waived having one done at all. Levels of Review – A bunch with VA and FHA – a lot of eyes on these home purchases – the greatest chance of the Sellers not getting what they want in the end.
Without the appraisals in place – investor buyers can offer more than “appraised” or fair market value and buy homes. Those numbers are recorded as housing prices. When enough of these record – you watch as prices increase. Today, we have been watching this happen for the last several months in the Santa Clarita Valley Cities. click here to see where the home prices are at today in the Santa Clarita Valley
What happens when the appraisal waiving investors quit buying and the appraisers start doing their job again? We will all hear a small “Pop”. It won’t cut home values at the almost 50% level we had seen in some of the Santa Clarita Valley cities. However, it will cause a decrease in real estate prices if we have the inventory to sell. click here to see the current levels of Santa Clarita real estate inventory in the specific Santa Clarita Cities