Ok, let me start off by saying that I am an REO Listing Agent in the Hemet - San Jacinto Valley in Southern California - right at ground zero for the current housing crises. I have been working with the banks since 2006...so please believe what I am about to share and believe that I have some clue as to what I am talking about.
The real estate market has been driven by consumers wanting to get in on the government action and take advantage of the $8,000 tax credit that has been the subject of many discussions for months and everything you ever wanted to know about the topic has already been published - so I'm not even going there today.
TODAY IS ABOUT URGENCY
The one detail about the first time homebuyer tax credit is that it is currently scheduled to expire and only be effective for homes that close escrow on or before November 30th, 2009. Today is October 2nd...so that leaves 59 days. On Monday the 5th we will be down to 56 days.
MUST CLOSE ESCROW
Nearly every offer I have seen with first time homebuyers seeking this tax credit are financing with the least expensive loan on the market today - FHA with only 3.5% cash out of the buyers pocket required.
I'm not going to spend this valuable time or space telling you how to write an offer - I have several recent posts on the topic that are very relevant for this weekend - so please check out The Perfect Offer...Or Cash is Still King or DOES AN FHA OFFER REQUIRE A MAXIMUM of 3.5% DOWN?. Both contain very timely information, based on this local market...and I'll bet competitive markets across the country.
AN FHA TAKES 52 DAYS to CLOSE ESCROW
Don't listen to that lender that says they can close in 30 days or even 45 days. My careful analysis of the local market reveals that over 100 FHA Loans close escrow each month in the Hemet - San Jacinto Valley, CA. The AVERAGE DAYS IN ESCROW that no one ever looks at except a local expert like me, is currently running 52 days. OK, yes for the benefit of a few loan officers - there are a very small handful of seasoned loan officers that take less than 30 days - there are also a handful of loans that take over 75 days to close escrow.. So, where do you want to be...?
DO THE MATH
You write the one offer that gets accepted this weekend...but you won't know for a few days because each offer must first be reviewed by the listing agent (ME), summarized and packaged to send to the seller who must also review the package. We need to speak with the loan officers and verify the funds - so make your packages complete and easy to verify - provide me with phone numbers and please don't make me a cyber sleuth trying to figure out your offer. Provide your own summary.
So, best-case scenario is the Asset Manager for the bank will have packets to go through on Monday afternoon and if we are lucky we will have an answer back on Tuesday afternoon - but more than likely it will be Wednesday or even Thursday.
THEN a packet of Addendums and or Counter offers will be prepared and forwarded to the winning real estate agent to have their client sign and return. IF WE CAN GET THIS BACK to the Asset Manager by Thursday afternoon, WE MIGHT open Escrow on Friday which is now the 9th of OCTOBER...leaving us with ONLY 51 DAYS TO CLOSE ESCROW! ! !
AND HOW DOES ESCROW FEEL ABOUT THIS?
Does anyone else think that escrow offices across the country just might be getting busy with a Tsunami of their own next week keeping them busy and under EXTREME PRESSURE to close these deals before the government imposed deadline that is looming just over the horizon. Oh, and please don't forget that there is a traditional 4 day holiday right before the very end...doesn't your escrow officer deserve to take off for the Thanksgiving Weekend? I don't think they get to add any additional fees for closing on or before 11/30/09.
AGENTS AND BUYERS NOW IS THE TIME TO TAKE ACTION
So by now you understand the problem. This is the weekend to write your BEST OFFER. Now is the time to forget about contingencies and pull out all the stops. Now is the time to ante up with the highest down payment and not limit yourself to 3.5% down...now is the time to give it your best shot.
The advice I have given to the five buyer agents of the Excellence in Real Estate Team at Allison James Estates and Homes is to spend this weekend with their database of buyers that they have worked with over the summer. Contact them all and explain the current situation - heck, send them the link to this blog post...even go ahead and re-blog it, I don't care.
The next step is to set an appointment for a very specific time - no more than 2 or 3 hours max, as you should have another family waiting for you at the office for the next appointment.
This is the weekend to write offers with every qualified buyer you have.
BUYERS WHO READ THIS
Buyers, please understand the urgency here - this is no hype this is the end of a very popular program that puts up to $8,000 in tax free cash in your hands to buy your first home. So please, come prepared with your check book and any other documents you need to get busy with your real estate agent and lender so that you can have your offer the first to be reviewed and accepted by the seller...there is a lot of pressure throughout this industry right now to help as many families as we can to get into their first home while this program still exists...so please, be ready to buy and not play games.
Until Next Time, Have a Blessed Day,
John Occhi, Hemet CA REALTOR®
This blog and the contents written here is the intellectual property of John Occhi, Hemet - San Jacinto Valley REALTOR® in the South West Riverside County region of the Inland Empire of Southern California. The views and opinions expressed are just that - views and opinions of John Occhi and those who comment. Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance.
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