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Florida Real Estate News
Low Ball and All Cash Buyers

charles rutenberg realty

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Low ball offers lose ground. All cash real estate buyers taking over

Second Quarter 2012 – When the number of home sellers outpaces the number of buyers, no offer can be ignored. In today’s rebounding market, unrealistic low-ball offers don’t work very often. Potential buyer usually don’t get a counter-offer from the seller.

A low-ball offer considered generally 20 or more percent off the asking price. The buyers rightly like to see if they can land a fantastic deal. In the current Florida real estate market...the number of listings outpace the number of buyers,
Today, offers 10% close to the asking price will probably get the deal, if a home is priced correctly.

Low Ball Buyers come mainly from outside Florida or from another country who have read older news about Florida's foreclosures and short sales.

Home buyers are encountering a great deal of competition from cash buyers and investors, especially for lower-priced dwellings in foreclosure markets, or homes in areas where the economy is improving.

Borrowers with 20 percent down payments for conventional mortgages are losing bidding wars. Home buyers relying on low down payment FHA loans are having a hard time because sellers must consider the extra home repairs required for FHA loans.


Traditionally, the same consumer credit scores are used to approve mortgages, credit cards and car loans. However, a new mortgage credit score – a joint venture of CoreLogic and FICO – takes more data into consideration in order to “improve lending decision quality and increase the number of mortgage loans lenders make.”

The new FICO Mortgage Score Powered by CoreLogic starts with traditional credit score data but it adds in supplemental data found in the CoreLogic CoreScore credit report introduced last year to generate a final mortgage-reliability score.

FICO says it created the new scoring model specifically to predict mortgage loan performance, and that it has shown a substantial improvement in risk prediction compared to other scores. And if lenders believe they can rely on the score, FICO reasons, they’ll make more loans.

“In this complicated operating environment, lenders increasingly turn to new data sources to help better interpret a consumer’s credit risk, so that more loans can be approved while mitigating potential losses,” says Tim Grace, senior vice president of product management at CoreLogic. “For a top-20 lender processing 300,000 applications a year, adopting this new score could translate into 3,900 more loans approved every year, along with a net financial benefit of $14.5 million.

 

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