Let the Bidding Wars begin! The battle lines have been formed and expanded since 2007. This is a battle that no powers or principalities will be waging. In the truest sense, it’s a duel; “An encounter between two or more individuals with equal numbers on each side that results in combat where both parties are equally armed….”. However, these duels will spill no blood. The weapons used are only pen and paper. And to be sure, with any duel, there are rules, or Code duello. In this war, the Code duello, is enforced and managed by Realtors, expertly trained in the art of negotiation and real estate laws. It’s a scary place to be without a Realtor.
Why the bidding war?
Answer is simple there are not enough homes for sale to handle the recent explosion of buyers onto the market. Mortgage Investors Group Loan Officers are being told by customers and agents that multiple contracts on homes are occurring within a very short period of time of one another. Also, market data is revealing that the percentage of sales price to list price are increasing. Typically markets trend to run about 92% to 95%, but some markets across the country are seeing percentages in excess of 98% with some areas over 100%. In Tennessee, Nashville-Davidson-Murfreesboro-Franklin are at or near the 98% range as far as the ratio of sale prices to list price, putting them in the number one ranked position in the Core Based Statistical Area for May. Nashville area is presently considered one of the most affordable markets in the United Stated and one of the best places to get a job.
This is a great sign for our economy, but these conditions create challenges for all parties, not to mention creating new home price bubbles; sound familiar? As these bidding wars ramp up, other issues will occur, such as appraised values. For example, once the bidding war has bid up a home’s list price, the question arises, will it appraise for that amount? If it doesn’t, the buyer will have to put the difference down in cash or risk losing that hard, fought duel.
What’s being done?
Realtors are trying to add more inventories to their MLS. Builders are scrambling to build more units, but they are finding it hard to find construction workers in some areas. Plus, the sudden increase in building permit requests have created big delays in local government offices. It’s true, the sudden change in our economic environment has created some issues in the home buying and selling markets, however, it will eventually seek some form of normalcy as things stabilize and balance. If you’re a seller, now’s a great time.
Mortgage Investors Group understands there are a lot of choices when it comes to financing the purchase of a new home or refinancing an existing one. Our licensed and experienced loan officers are here to help you gain a better understanding of those options and answer your questions about the loan process, qualifying and the different features of each loan program. We offer everything from conventional mortgages to government loans.
Call us today and take advantage of these incredible market conditions!