On today’s show we’re talking about one of the patterns that has emerged with new home buyers.
The typical scenario with a new home or condo purchase involves signing a purchase agreement, several months, sometimes a year in advance of the actual delivery date of the finished product. There are a number of real estate closings scheduled for August and September this year when the actual agreement was made in the fall of last year. In some cases, the agreement was signed over a year ago.
So fast forward to today. Interest rates have increased. Appraisers are taking a much more conservative approach on the valuation under direction of the lenders. When they got to the closing and many buyers did not have a rate lock on their financing. They also didn’t have a bank appraisal to accompany the loan request at the time of purchase.
While the borrower may have qualified with the bank when they signed the deal, they didn’t have a commitment letter from the lender with which to close the deal.
Host: Victor Menasce