What you need to put a deal together

What you need to put a deal together

Conceptually, buying and selling property is no different than buying or selling any other commodity. Basically--a product, buyer, and seller define the process. Why then does it seem difficult, especially in current climate, to bring a fair deal to the table?

Kick these around and see if they ring true for you.

1) Lenders are not being especially cooperative or efficient: If the former rule of thumb was to lend to almost anyone, the current climate now often denies individuals who are credit worthy.

Where no documentation was required, the lending institutions now require several paper mountains to accumulate and be reviewed by over worked underwriters. My recent dealings with lenders demonstrates a lack of motivation to lend.

(Side note on single and double wide manufactured homes: In our rural area, single and double wides abound. Single wide mobiles are totally off the table. If a client can't buy for cash, they are out of luck. Double wides are extremely difficult to get through. The interest rates are 1.5 to 2 points higher for funding than conventional loans. Additionally, loan terms are generally a maximum of 20 years. Lenders often require 30 or more percent down. Although some financing programs still do exist (FHA)the stringent requirements, soon to be even more stringent, disallow our working populace the pleasure of owning a home.)

2) In my home market of Sullivan County, NY, sellers still remain somewhat unrealistic in their expectations. New listing prices are often not supported by current market conditions.

3) Buyers, knowing it is indeed their market, are lowballing offers that simply don't make the grade. It is one thing to offer a certain percentage below realistic pricing, say even 20 percent for starters; it is quite another to slash a well documented price tag by 50 percent. Recent data in our county suggests that 12% percent below adjusted asking prices (prices revised downward from original listing price) are the number at which most consummated deals are made.

4) Our economy is not conducive to buying homes. Home inventory is quite high and serious buyers are scant. Prices may yet fall further. What are the incentives to move quickly on a purchase?

5) Appraisers seem afraid of using the higher comparables available for analysis. Experience in my home market demonstrates that deals fall through based on properties not apprising out--a mortgage killer in many circumstances.

Although many other factors are involved in real estate transactions, the points discussed here are more than enough to make seasoned veterans bite their nails.