By Jonathan Osman
Step 1: Find a buyer. In my market, the unemployment rate is 11.1 percent and the under-employment rate is around 16-20 percent. While a few years ago, one could conceivably purchase a house without a job; today, employment is essential.
Step 2: Find the buyer a loan. As long as the buyer has a job, modest credit scores, and reasonable debt load, this can be accomplished with relative ease. However, only 75 percent of buyers ever make it past Step 2.
Step 3: Find the house. SO VERY EASY especially with only 24,000 homes in the market to choose from; 5 percent being REO, and the buyer wants “a deal.” The buyer then proceeds to view all 24,000 homes, making offers at fifty cents on the dollar, with only a $10 earnest money check.
Step 4: Under contract: Oh yeah baby. I can count the dollars now. Just sit back and wait for the closing day. If that were only so true…
Once the home is under contract, now there stands a nearly insurmountable set of obstacles that will kill any transaction such as (All of the following actually happened at some point in the last 3 years):
- Did the inspection reveal needed repairs? Yes. Will the seller repair? No! Deal dead.
- Does the inspector freak the buyer out over unnecessary repairs? Yes! Deal dead.
- Does the house have mold? Yes every house has mold? Buyer freaked? Yes! Muerto.
- Did the house burn down before closing? Yes! Does the buyer still want it? No! Done. Continue reading »