Welcome to the Spring Market 2018. We’ve seen an increase in home purchase activity in April, and we’re excited to be in the Spring Market!!
As we enter this exciting time, we thought it would be nice to provide you with some information that we’re seeing across the Twin Cities Housing Market from a Mortgage Loan Originator’s perspective.
2018 is a different market from years past in two main ways. First, we are seeing a greater sense of urgency from buyers. Sellers are listing their homes and often receiving multiple offers within 48 hours due to a lack of housing inventory. This does not allow time for buyers to get pre-approved AFTER seeing the house of their dreams.
In fact buyers are having the most success in winning multiple offers when they do some homework in advance. At AMEC Home Loans we are able to offer a Closing Guarantee to our buyers who are pre-approved through our AMEC Express Underwriting Program.
This means that we receive income documentation and the borrower’s credit report and then we send the information to a real human underwriter. The underwriter will review the file and upon a Conditional Approval, we are able to guarantee an on-time closing to the sellers. If we do not close on time (subject to terms and conditions), we are able to issue a $5,000 check to the sellers and $5,000 towards the buyer's first payment. By taking the time to receive the AMEC Home Loans Express Underwriting Approval and working in advance of your offer submission, you can strengthen your offer!
2018 is also different from an appraisal perspective. We have been running into issues in 2018 with homes not appraising for the agreed upon sales price when Seller Paid Closing Costs are included into the price. With year-over-year appreciation rising in the Twin Cities Housing Market, appraisers are unable to value SPCC’s into the value of the homes in many cases.
For example, you and the seller agree that the home has a value of $160,000, but you’d like them to contribute $5000 towards your closing costs, so you offer $165,000 with a SPCC clause. If the appraisal is returned at $160,000 - you will need to renegotiate with the seller or pay those closing costs out of your pocket as the value will only allow $160,000 with your lender.
We’ve seen the exact scenario above multiple times in April. Make sure to consult with The Spiczka Marketing Group to determine if they believe the property will appraise with those closing costs included and for the best way to write your offer. They are the experts!!
For any additional information regarding AMEC Home Loan’s Closing Guarantee program, or ANY mortgage questions. Feel free to contact us!
The Mortgage Matchmakers