Sunday, August 17, 2008

Multiple Offers Reapearing

Multiple Offers Reappearing
By Mary Funk, President
Southland Regional Association of Realtors.

While many prospective home buyers are still waiting in hopes of catching the bottom, others are jumping into the residential real estate market feet first and, in an growing number of instances, they wind up competing with a swelling legion eager to capture a bargain.

At a recent meeting involving dozens of members of the Southland Regional Association of Realtors, all of the Realtors said they had recently encountered home purchases where a handful of buyers presented competing purchase offers.

It's happening in all price ranges in all communities," one participant said.

Many of the properties have list prices that had been discounted from year ago levels, including a number of bank-owned houses that had been involved in foreclosure proceedings.

The activity level is no where near the frenzy of the sellers' boom, the participants said, but offers are coming in, near and, in some instances, above the already discounted list price.

The report represent a significant shift in a market that had been paralyzed by buyers who had been glued to the proverbial procrastinator's fence. Buyers' hesitancy created endless work but no sales for Realtors, who typically are not compensated until an escrow closes.

That lack of urgency now appears to be fading as more buyers enter the market at a time when government-sponsored programs appear to be settling the finance industry, thus making home loans more available and affordable - albeit at stricter qualifying guidelines which require proof of income and down payments.

Buyers who are entering the market believe they have a secure source of income, faith in the local economy and realize that waiting to catch the top or bottom of any real estate cycle is risky business, with success hinging on a large dose of luck.

The recent increases in government-insured mortgage limits are expected to provide much-needed liquidity and stability to housing markets across the country.

That is especially true in California - a region with particularly expensive homes - where tens of thousands of families could be eligible this yer to purchase or refinance their homes thanks to the recently approved Economic Stimulus Act.

The higher loan limit expands the pool of eligible borrowers, enabling more families to qualify for safe, affordable FHA-insured mortgage loans which can be as high as $729,750.

By focusing on 30-year, fixed rate mortgages, FHA helps home owners avoid and escape the risks associated with exotic subprime mortgage products, which have resulted in rising default and foreclosure rates.

While still at historically low levels, rising sales suggest that the worst may be past and that more buyers believe that the time to buy is now.

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