No FHA, Conventional Finance and Cash Buyers Only!!

July 17, 2008

qualified real estate buyers only in AZIn greater Phoenix, it seems that investors and first-time home buyers are looking to buy only homes listed as short sales or REO (bank owned real estate).

I am working with numerous first-time home buyers who are looking to purchase real estate in Scottsdale, Fountain Hills, Peoria, Tempe and other towns around Phoenix.

However, Realtors and home buyers are running across a new challenge.

I have started to notice short sale and REO listings on the MLS in which the bank/lender is asking for the following language added to the remarks:

  • No Government Products allowed
  • Offers must be Conventional Financing or Cash purchase only!!

In fact, even if banks are accepting FHA or Government or non-profit down-payment assisted financing , like Ameridream or Nehemiah , lenders are accepting significantly lower offers than other offers by qualified buyers who are using these programs.

I am aware of a buyer’s rejected offer on a property for 10% less cash price offer as the bank said, they “do not want to deal with FHA” financing.

I am concerned with this trend of banks looking at discouraging qualified buyers.

  • First-time home buyers are what built our real estate economy.
  • First time home buyers create the foundation of liquidity in the housing market.
  • These buyers are the owners who sell to the next generation of first time home buyers.
  • They are the buyers of the next higher tier of housing that allows those to sell and move upward.

I understand that banks want to sell their REO property as quickly as possible and further want to make sure that contracts do close escrow.

However, I think this may be a dangerous tactic of turning away the buyers that make real estate a liquid market and ultimately the main method of banks earning money. Lending!!

____________________________________________________

Copyright © 2008 James Wexler *No FHA, Conventional Finance and Cash Buyers Only!!*

Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs

Related Posts

Written by James Wexler · Filed Under Articles, Buyers, FHA/VA Loans, Lending / mortgages 

Comments

One Response to “No FHA, Conventional Finance and Cash Buyers Only!!”

  1. mitchell on July 18th, 2008 6:53 am

    It’s amazing that with the banks already losing 40 to 50% on the sale, that they would be willing to take lower priced offer simply because they are in such a hurry for cash flow. Good Article

Got something to say?