Why Cash Buyers and Low Inventory Is Making Home Purchasing Difficult for Farmington Hills Non-Cash Buyers

Why Cash Buyers and Low Inventory Is Making Home Purchasing Difficult for Farmington Hills Non-Cash Buyers

A recent real estate market analysis found that nearly one-third of all home purchases nationwide were cash transactions between January 1, 2021, and April 30, 2021. Remember, what is happening nationwide reflects what’s occurring in the housing market on the local level. Adding that housing inventory is low in Farmington Hills, Michigan, it’s becoming increasingly tricky for non-cash buyers to get a foothold in the home purchasing race, never mind winning it, taking the prize of homeownership.

Tips To Beating Out Cash Buyers

So you’ve found yourself going up against cash buyers in purchasing that dream home. Don’t give up! There are several ways to get yourself on an even playing field when dealing with cash home buyers in Farmington Hills.

Increase Earnest Money Deposit

Earnest money is essentially a deposit put up in good faith that reserves your right to purchase the home. If you back out of the contract without reason, the seller retains the earnest money. Increasing your earnest money deposit shows the seller that you’re serious about buying their house.

Get Mortgage Pre-approval

Mortgage lenders typically offer fully underwritten preapprovals. Meaning they’ve run a credit check and verified your finances for your mortgage loan before bidding on a property. Pre-approvals give the seller an added layer of credence that you’ll follow through as a qualified buyer. Generally, the document required by a lender for pre-approval is proof of assets and income, optimal credit, and verification of employment, typically called a VOE.

Better Adherence To Seller’s Timeline

A seller’s goal is likely a smooth transition. However, keep in mind they too are making a move, possibly to a new home. Extenuating circumstances possibly command a quicker process, or they may require some extra time before vacating the property. Be agreeable when it comes to meeting the seller’s needs if you’re in the running with an all-cash home offer.

Appraisal Gap Guarantee

An appraisal gap guarantee guarantees that the home buyer covers the monetary gap between the contract price and the appraisal if it comes in too low. To overcome a low appraisal, a buyer pays the difference or renegotiates with the seller.

Go Above Asking Price

Cash buyers are notorious for going below the asking price, knowing a quick sale is enticing to some home sellers. A buyer has the option to include an escalation clause that automatically increases your offer to a maximum stated amount if a cash buyer outbids you.

Limit Contingencies

Limiting or waiving contingencies isn’t entirely without risk, but it shows the seller you’re willing to work with them to secure the deal. The financing contingency, inspection contingency, sale contingency, and appraisal contingency are items to consider waiving to simplify the home buying process. Keep in mind that waiving these items waives certain rights like an inspection, backing out of a contract, or renegotiating.

Farmington Hills Housing Inventory: The Lack Of

Farmington Hills Housing Inventory: The Lack Of

As a Realtor for 17 years there I personally have never experienced a time like this for Farmington Hills housing inventory and the lack of it. The last time I checked the statistics thereFarmington Hills Housing Inventory: The Lack Of were less than 2 months’ worth of inventory currently in the Farmington Hills housing inventory which play into itself and effects more homes to become listings and available on the market for home buyers. It would seem that the very low Farmington Hills housing inventory prevents current home owners to get their homes on the market as they may find themselves in a situation as most home buyers are now.

The Farmington Hills Housing Inventory and the Domino Effects

Although this is a “sellers market” in Farmington hills, the prices of the few homes that are available are priced high, some out of reach for an average buyers income and growing.  In a blog post “Farmington Hills Existing Home Sales Dip-Inventory to Blame?” explains how this effects the ability for buyers to purchase a new Farmington Hills home. As a professional realtor I have to put myself in a sellers position in order to clearly see the whole picture to try and determine the reasons for the low Farmington Hills housing inventory in order to service and understand both my home buyers and home sellers position in this market. It is clear that one thing is true, how can one sell if they cannot find another home to move to or find something affordable in the nearby market?

Recovering From The Farmington Hills Housing Inventory

I’m a Realtor not a “fortune teller” but being in this business for quite some time I do know as everything in Real Estate, what goes up must come down and we are starting to see this in our Farmington Hills neighborhoods. As of today there are 221 properties for sale in Farmington hills of those, 92 have had price reductions, which could be a good sign for home buyers currently looking to purchase. It is my belief and my many years of experience is that the sellers market will begin to cool off somewhat this fall in Farmington Hills and more inventory will become available for home buyers as home sellers will head in the winter season needing to sell their homes.

I’m here to help you in all of your Farmington Hills and Oakland County home buying and selling needs, I’m realistic, dependable and know the market that I work in. If you need any help, advise or guidance please give me a call 248-790-5594

Read the Original Article Here: Case Shiller: Home prices continue to reach new highs

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