6 Most Common Problems Faced By Buyers in The Seller’s Market
March 25, 2020
We agreed that buying a home is not an easy task to do, it requires a lot of effort and time to select the perfect fit home as per your needs. According to a study, it was found that 60-65% of buyers face the problem while selecting a new home and it’s rarely smooth sailing for them. The study reveals that there are numerous most common problems faced by buyers in Seller’s market are poor home conditions, delays in the home left, etc.
So, the basic step or the first step is to get “prepared” for the challenges that you're gonna face. The basic issues that a buyer can face are the location, budget, house preferences, etc. however there are certain most common issues which are specific for the flat or house buyers. Although it doesn’t make the impact on your home category and location choice. It’s no hidden that there are numerous home sellers or real estate agents available to sell the property. But selecting a real estate agent can be the right choice to go for!
So, Why do you consult the real estate agent over the normal home sellers?
When you contact the real estate agents they work to provide you with the full confidentiality, privacy and fiduciary! not even this they also help you to find the right fit home as per your preferences. They know the worth of their clients thus they always put their clients first, they know what you are looking for and always guide you throughout the whole home buying process. They are also expertise in negotiating things, thus they can do that for you too. But that doesn’t mean that you will not face the stumbling issues. Therefore in this article, we are explaining the 6 most common problems faced by buyers in the seller’s market. So. let’s take a look……
Have the minimum FICO score -
The word FICO score refers to the three-digit number which is based on the information of your credit reports. The FICO score helps the lenders to determine whether you can pay the loan or not. For mortgages, every home buyer must score at least 720 for conventional loans with mortgage insurance and on the other hand 620 for FHA. If someone’s score is less then these pre-decided numbers then they are considered non-qualified for the mortgage loan. Therefore it is important to check the FICO score timely. For this, you can ask your lender to check your credit report. You can increase your FICO score too for increasing it you have to pay the amount. The increased score may differ from your lender’s score which they obtained. After that, your lender will take your credit scores from all three credit reporting agencies and also take your middle score of FICO.
Reaching the seller’s ratio -
Most of the home lenders expect at least 30 percent of the front end ratio which involves mortgage taxes +payments insurance i.e. all (PITI). Another major thing is that it will not extend up to 33 percent of your gross monthly income. For example, if you earn $6000 a month, then you have to qualify the minimum PITI payment which is $1850. On the other hand, there is also the back end ratio which is quite a tricker one to manage. This involves adding your PITI together with all your monthly debt involving payments. That involves all your PITI payments and percentage of your gross monthly income which may fall between 42 percent to 51 percent. This whole depends upon the type of lender and the land. But with the mortgage insurance, your highest back end ratio will not increase up to 42 percent which means you have to approach down at least 20 percent to qualify the back end ratio.
Submitting the documents -
Submitting the documents can confuse you whether you have to submit it or not? Or on the other hand, the underwriting of the documents can also be your major concern. We understand that you have to sign up for all the terms and conditions which are mentioned by the lender. So, we suggest you not get afraid or confused as the underwriting documentation involves the demands, rules and documentation and rent appraisal which is quite considerable as it is a legit process. As the underwriting is legal every buyer must have to get signed to it.
There are various reasons due to which an underwriter can reject the concerned documents. You can understand it with the example- if you have done a remarriage and your last home is going under some sale process having your former spouse and your name on that property document then you cannot be liable to buy a new home with your new spouse. The only way to decrease the negative possibilities is by clearing your name from all the past documents and make your financial state clear so that the lender can understand enough about yours.
Receive an upgrade in the value -
As compared to the past appraisal making process the current appraisal making process has its own critics and flaws. After the new rule made in the real estate industries, the HVCC home valuation code of conduct involves the set of rules which have been applied to determine the conventional transactions which now applies to the FHA transactions too.
In the old days, the buyers could select their appraiser who is generally experienced in the same field. Their appraiser is the one who has done appraisers for many homes in the neighboring home of the particular area. This helps the buyer to get a balanced and fair amount to pay to the appraiser. Buy after the changed rules only the appraisal management companies will pick the appraiser which does not come from the same field or even the neighboring area. It just results in a low appraisal. In case, the seller denies the appraiser’s value then the buyer must have to agree for the appraiser contingency. It depends upon the buyer whether they want to pay for the amount or want to walk away from the transaction.
Having the down payment -
Well if you are wealthy enough then you don’t need to go for the mortgage. And if not then you have to take the help of a mortgage. It just depends upon the loan giver some may charge the zero down payments and some may offer specific types of loans under some conditions. The most popular loans are FHA loans and conventional loans. Majorly many charges the minimum down payments which involves 4 percent to 16 percent of the sales price. Hence you can directly contact the lenders and clear your financial state so that you can smoothly make the payments with good down payments.
Unexpected condition of the house -
This is one of the most common issues which are faced by many of the buyers. This might take place only because of the reason that the last home renters haven’t taken care of the things. Therefore it is important to consider the real estate agent and tell them to communicate with the house seller about the furnishing or the finishing of the home. You can also communicate directly to the seller about your home essentials so that they will keep in mind about keeping home things in a good state.
We must say that moving into a new home can be a time consuming, stressful and tiring task to do but to get a blissful and perfect house you have to concern these issues. It can be understandable that some issues can be out of control. But there is always an alternative to tackle the issues. If you don’t want to face the issue then doing the proper communication with the seller can help you in tackling all the situations. Also opting well-known advisers like the real estate agents or removal of conveyor companies can help you in making the smooth move too.
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