I am still trying to understand my real estate market. Nothing substantial from the listing side seems to have changed. There has been more activity in the high end (over $1,500,000) in listings coming on but from the sales side, those properties aren't moving very well.
What is moving? For the most part, properties under $500,000. I don't understand what is happening to all the Contingent/Pending properties. Commitments and mortgage lock in rates are coming close to expiration dates and banks are asking for, what I consider, ridiculous amounts to extend these agreements.
A recent example of this situation: A first time home buyer, buying new construction. The builder has been hit by the market downturn and has been struggling to complete this home. Getting close to the closing date and needing a specific punch list completed before the appraiser can sign off on the value, the builder is in a car accident and is in the hospital. With the clock ticking on the lock in and the commitment, the bank is now asking for $1,500 to extend the mortgage commitment.
Is this what is happening in many cases? Properties are going into contract and stalling. I can't help but wonder if this is a plan on the part of the banks. Delay everything and then ask the consumer to cough up more money just to keep the deal going. The situation presented above is not the first, just the most recent example.
Is this happening in other markets and can we, as real estate professionals, do anything to help correct this situation?
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