Bird’s eye view of key cities in and around Seattle in Puget Sound area (that I usually like to track)
Once again Buyer in Jun month get upper hand as lot more listings are available and classic balancing of supply vs demand is on display.
Increased supply has definitely softened the prices and crazy bidding war days seem to be behind us, this happing in Jun is unusual as this month is still considered HOT month for real estate market.
How this translates for Buyers?
- They get to pick properties, as properties now sitting in market longer
- Specially in hotter areas (Bellevue, Redmond, Issaquah, Seattle, etc.) Buyers don’t have to take bigger risk of waiving all contingencies
- Now, Buyers don’t have to risk huge sum of money as non-refundable deposits
However, this by no means indicates any kind of crash!! In this region property prices have been growing in double digit year-after-year for almost last 5 years now and it had reached a tipping point, this softening of price was waiting to happen with rising interest rates!
One question everyone is asking – my clients, drawing room conversations, anyone I meet on road 😉
- Is REAL ESTATE market CRASHING?
- Why MARKET seems to be SLOWING down?
And various version (you get the drift)
I like to look at statistics, let’s look at May’18 Stats – notice big bump in New Listing as well as total on-market inventory available for Buyers. Clearly, making it favorable for Buyers 🙂
Why Realtor is advising me to go with a certain ‘Local’ Lender even when I feel that rates are NOT as competitive as I am being offered from national and online banks? All other terms seem to be equal and it looks like no brainer to go ahead with the national/online bank.
Yet I am being advised by lender/realtors that in this competitive market if I want my ‘offer’ to be accepted or taken seriously by sellers/listing agents I should be Pre-Approved by Local Lender of repute. Otherwise they claim that my offer will remain at the bottom of stack even if financially I might offer higher price!
They mention things like sellers’ trust of local banks/lenders, faster closing, and or full-appraisal. Is all this really true?
When shopping for your house loan, you must consider two different factors in a mortgage lender –
- If you are getting best rates and/or terms of a given loan
- Making your offer competitive (in current market)
Rate and/or Terms –
National banks/Online companies (like rocket, quicken, etc.) use lower interest rates as teaser to get maximum clicks and obviously engage potential clients. However, they don’t have full information on the local market or the subject property.
On other hand local lenders/banks (Academy Mortgage, Evergreen, Calbre, etc.) start with higher generic rate but they have the ability to drop the rates (within a certain limit) to make the offer bit competitive. Some of these Lenders do offer interesting new programs that might be attractive to you (ask your lender or a well-informed realtor will be able to update too.
Its good idea to interview with couple available options and get yourself pre-qualified by 2-3 companies (as a starting point). This will not have any effect on your credit as there’s certain period within which you can get this done and your credit will not take a new hit.
Your Realtor/Agent as professional ends up having rapport with these lenders and they have seen them operate in various scenarios. They don’t get any sort of benefit in these recommendations.
Factors like consistency in promised time-to-close, familiarity with listing agents, personal touch do matter when sellers and listing agents are going through a pile of offers on a given house!
Remember, as sellers, they want least risky offer that is supported by a lender/institution pair with a reputation of closing consistently on time. These are local names and sellers and listing agents have had first-hand experience with them, it does make difference, That’s final touch of familiarity. Let’s face it, property transaction is one of the biggest transaction and familiarity and trust does matter.
Their appraisers appraise given property at full price thereby minimizing the risk of delays. Some independent lenders can close a transaction start to finish in as many as 16 days! This sure makes your offer stand out.
Bottom-line, local lenders/banks tend to be more accountable than some national/online institution.
P.S. These are my personal opinion, after experiencing several scenarios with various clients and speaking with several lenders.
In this market finding a home in Bellevue on budget does seem like an uphill task. However, if you work with right person and have a right strategy its not impossible!
Buyers’ TIP – When you are looking for a home under/upto 500k in HOT area like Bellevue be prepared to pay minimum 6% above asking price. This means look for houses under budget so you have room to move up in escalation bidding war.
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