Home Sale Contingency

Hey folks..time to address another issue in the current Hudson Valley real estate market. More and more potential buyers are, as part of their offer, making the purchase "contingent" on the sale of their existing home. When gas prices went up, the buyer pool from New York City and Rockland county nearly dried up. That left home sellers with a potential buyer pool almost exclusively from this area. With prices still as high as they are, buyers can't afford to purchase a home outright. Therefore, the only way for them to buy is with a large portion of the selling price coming from the sale of their previous home. If you are a seller waiting for a 20% down payment with a conventional mortgage, you'll be waiting a long time.. I just closed on my 37th house this year and not a single loan was of the "old" conventional variety. While seller's concessions and home sale contingencies do put the seller at greater risk, they provide a means for a buyer to purchase your home...the proverbial win-win situation...Just make sure your Realtor understands and is familiar with these types on transactions.

The Seller's Concession

A lot of people have been asking about "seller's concessions". I would like to take a few minutes here just to outline exactly what it is and how it impacts your ability to buy a house. Let's say , for example, that you are buying a house for $200,000. But, you don't have the closing costs (mortgage fees, school taxes, proeprty taxes, title fees, attorney fees, etc.) which are approximately 10% of the selling price. So now, our 200,000 house is actually costing $210,000.
Lately, most buyers don't have $10,000 in closing costs, so they try to get a mortgage for $210,000 to cover the purchase price of the house plus the clsoing costs. This is a great way to buy a house for little or no money down (more on that another time). The only problem however is this...the house has to apprasie for the $210,000 not the $200, 000. A real problem when prices were so high they were already at the top of thier appraisal numbers. Now, however, prices have dropped considerably and last year's values are still being used for appraisals..so....its realtively easy to get a seller's concession on top of a morgage.. Bear in mind though, you will be making payments on $210,000 rather than $200,000. I sell a lot of homes in Orange, Sullivan and Ulster counties and this form of financing is becoming very prevolent with today's buyer's. If you are a seller, expect an offer to contain a seller's concession. If you are a buyer, it a great vehicle to save your "cash on hand" for home repairs and fix ups.

With the holidays approaching, Orange county real estate has seemed to slow up even more than recent months. While I'm still seeing buyers in Monroe, Montgomery , and Pine Bush area, they are mostly below $300,000, with the most activity in the $250,000 range. This week alone I sold four houses -all under $200,000.
In fact, if any reader's are looking for a home, this is a great time to purchase..There is a healthy inventory and even though rates have risen, they are still historically low...