I’ve touched on a lot of these issues in past blog posts, but let’s just go through them all—home inspections, appraisals, mortgage process—in one place.
Home inspection is a big one; buyers and sellers are fighting over what gets fixed and what doesn’t. It’s not that home inspections are new, or that they’re done differently, it just seems the mindset of both the buyers and sellers are different. The buyers think they deserve to have the perfect house and the sellers have the mindset that you get what you see. In the past, the mindset was also that we’d do a home inspection, and if there’s a major issue, we’ll discuss; otherwise, we’re fine, let’s just move on. Most people these days, even though they’re buying a used house, don’t want to fix it up, or to work on it. When we bought 20 years ago, we expected to fix or change things to the way we wanted them. Buyers today seem to want something that is perfect to begin with, and that’s probably part of the problem.
Appraisals are also a big issue. We’re in a rising value market, so housing prices are going up. We’ve seen bidding wars on houses because of lack of inventory, but we’re still using appraisals from the last three to six months when the value was a little lower. As a result, we’re seeing some issues with appraisals not matching up to the purchase price.
The mortgage process is just not what it used to be. It’s not an easy process; there’s a lot of paperwork involved, and there are a lot of headaches. Sometimes the underwriters ask for ridiculous things, but they’re really concerned about bad loans, and being able to sell their loans. They are also worried about their jobs, so they pick over things that used to go unquestioned. Sometimes you just need somebody who’s going to get you through the mortgage process, who can fight the proper battles with the underwriter, or to say, “It’s silly, but we might as well give them this because it’s not worth the fight.”
In the past, there were instances when someone who wanted to buy a house could do so with virtually no documentation. It was easy. We were doing no document loans just because it could get done quicker. People didn’t want to deal with the paperwork, so we were just basically filling out a form and they were getting loans. No wonder we are where we are. It makes sense. Now we’ve gone to the opposite extreme and they want to see everything. I always joke around at the end that the only thing left is a pint of blood.
The funny thing is that this market, in pockets of New Jersey at least, has turned into a seller’s market very quickly, from a buyer’s market to a seller’s market in the last six months. It does depend on where you are, but in Northern New Jersey, it really is a seller’s market, and the problem is lack of inventory. There are buyers out there, but not enough sellers. The ones that are out there are seeing bidding wars, and the houses are selling quickly all of a sudden. Of course, it depends on where you live. There are still areas in the country that are struggling, and sales are low. It really depends on where in the country you are.
Markets can change quickly, but issues with home inspections, appraisals, and the mortgage process itself are almost always present. Having a mortgage advisor that can guide you through this process, no matter what the issue, becomes even more crucial in an ever-changing market. I’d love to help YOU through the process – call or email me today!
