Lending Obstacles

Tougher Appraisals.  One of the changes that we are seeing in the real estate market today is the difficulty of obtaining the loan.  The lenders have gone from an “anything goes just get it done” attitude to a strict make sure all the ‘t’s are crossed and I’s are dotted” attitude.    Some got caught with their hand in the cookie jar and now it would seem we are all going to suffer the results.  There are still a multitude of options but lenders are no longer interested in working outside the box.

A recent article on Bank Rate.com  indicates that the appraisal is one such area.  If an appraiser can not find three comps (“Comps” are recent sales of nearby homes that are similar, or comparable, to the home that’s the subject of the appraisal.) in the area the loan may not go through at all because the appraiser doesn’t have the comparative materials.   The lender may have in the past helped this process by helping to ‘find’ the comps.  But lenders are running scared and don’t think they can even talk to the appraisers.  This is the time to get the seller or the buyer involved.

Home sellers and Real Estate Brokers can offer the appraiser information that might affect the appraiser’s opinion of the home’s value.    Also, if the seller is aware of a similar home that is a foreclosure, short sale or divorce situation that has already paid for the appraisal they should share that information so it can be used as a possible comp.

Buyers should look over the appraisal and notify the lender of any errors that could have affected the appraiser’s opinion of the home’s value.

 Another  factor is; of course, credit rating.  Everyone has had a tough time.  The economy has slowed, jobs have been lost and people have been slow to pay.  We are now seeing the results in lower credit scores.  The effects are devastating for most and for the ones that were able to ‘hold-on’ and are now ready to buy again the stricter bank and government policies are holding them back.  When the buyers NEED the creative financing options they are no longer available or lenders are frightened.

Steve Hillyer