September 27th, 2023
While our continued lack of supply has prices ticking back upward, the local real estate market remains a tale of two cities – no matter what city you live in. It remains a competitive environment for prime properties in popular neighborhoods that are priced correctly and well marketed. These listings are selling quickly. But today’s more discerning buyers are not blindly chasing after challenging or overpriced listings like they were back in the go-go days.
While the return of rising prices is good news for some, the overall marketplace is gummed up (technical term!) and operating at less than peak capacity with many buyers and sellers sidelined by some combination interest rate pain, fear of selling and having to buy in a tight market, or just general economic uncertainty. The number of new listings hitting the market each month is well below historical norms, which deprives the whole ecosystem of the fuel needed to operate efficiently.
One group responding to these current market conditions is our partners in the mortgage business. Clever lenders have come up with some creative loan products designed to help buyers and sellers navigate around the obstacles keeping them from making a move. Here are a few.
Listings that sit on the market for a while can create negotiating opportunities for buyers. In lieu of (or perhaps in addition to) straight price negotiation, getting a seller to contribute to mortgage fees as part of a transaction can allow qualified buyers to take advantage of lender “buy down” programs. These programs take the sting out of higher interest rates by lowering the rates for a period of years at the front end of the loan.
Several forms of what used to be called bridge loans are alive and well and can be tailored to fit specific buyer and seller needs. These programs involve borrowing in the short term against the equity in your current home, and/or the one you want to buy, removing the stress of having to sell before buying. Another variation can make you a cash buyer when making an offer even if you will ultimately be taking out a loan to finance your purchase. This can be a game changer in a competitive purchase situation.
There are more options where these came from and obviously all of these programs are much better explained by a mortgage professional. Full disclosure: I’m not one, but I know some great ones including right in my office who can walk you through all your options. Let me know if you’d like an introduction.
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Rip.
