Low ball offers lose ground. All cash real estate buyers
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
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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