Last month, again, we saw a drop in first time home buyers on a national level. In many ways the deck is stacked against them. Yes the market is good . Interest rates are still low but......
Let take for example buying a HUD home. So you meet a couple looking for their first home. They do not have a lot of money, but they have good credit and stable jobs. They also are willing to roll up their sleeves in a home or maybe even have family members who have skills and are willing to help out in a fixer upper.
So you go and make sure they are prequalified. You recommend a HUD home. Why ? Because HUD gives preference to buyers who are going to live in the home. This will help your folks who probably cannot compete with all cash investors in the foreclosure market. You bid on the home and you get it. Now the problems start.
1 As we all know in order to buy a HUD home today you have to bid over the asking price. Some banks are not sending out appraisers and are using the HUD appraisal. This means the buyer has to come up with the difference in cash.
2 After the inspection and the appraisal is in no matter how much time you give a bank usually they will come back with conditions about 5 days before the closing and then of course need more time. In many areas this will cost the buyer 375 for an extension. Remember you are dealing with first time buyers who are squeezing their pennies.. Many conditions involve the property. Even though HUD escrows money you will have to deal with this issue.
The bottom line is on a HUD home if you are getting a mortgage it can be a real problem. In the foreclosure market you are competing against investors who are all cash.
Are there homes out there first time buyers can buy ? Sure. But they will not often be the least expensive. I have worked with many first time buyers and helped them buy HUD as well as foreclosed homes. Buyers you need a good Realtor who can help you navigate this market.
Yes the deck is stacked against you , but working with a professional can help you even out the field.