The best deal is actually the one you can get a loan on.

Buyers Beware

We have had a crushing 3 years of a buyers market here in the Tampa bay area, indeed the whole state of Florida.   Sellers thought the good times would never end so they borrowed and borrowed and never saved a cent.   They had a hard time adjusting to the falling home values.  "Under water", "upside down", "short sales" became a routine part of the home buying and selling process.  Buyers regained a more level playing field. 

Well it has been a long 3 years.  The price has dropped on that home beautiful home down the street. Rates are low. Now you're ready to buy.  You scraped your 3.5% that the lender says you need for that new FHA mortgage.  Time to pounce. 

Oops!    While you were waiting for that price to drop to a fire sale price, the credit markets seized, the home has sat vacant for 2 years. The roof began to leak, mold grew on the walls.  The FHA inspector just told you "no go" on the house.  What?

Or maybe it is beautiful old house in need of a paint job? Sorry peeling paint.  Lead based too boot!  No loan for you.

Now I have nothing against FHA loans but when you are asking government to guarantee your loan, there are some strings attached.  Yeah a conventional loan with 20% down is tough.  But lenders know you got some skin in the game.  That conventional lender won't be as strict about the condition.  Unfortunately you haven't saved, and you still owe 5k on that last vacation.

It not the buyers market you thought.

Specializing in a older neighborhood, I would say more than 2/3rds of the short sales and bank owned properties won't get past the FHA inspectors and the sellers aren't going to put out money to fix it.   The inventory that is actually open to you is actually smaller than it was 2 years ago. While the buyer pool is small, everyone is chasing those same few homes.  Most of the desirable houses aren't on the market because the sellers actually have a choice. These days best deal is actually the one you can get a loan on. 

I just saw 2 homes go under contract in less than a week without a big hit on price.  Why? They were in good condition and could pass FHA standards.  It has been a long time since that happened in my urban neighborhood. 

Buyers beware the market is changing again. (at least in my fish pond)

Rick Fifer, 813-758-7444