Wednesday, September 21, 2011

18% OF ALL REAL ESTATE CONTRACTS CANCELLED IN AUGUST

Nationally, nearly one in five homes under contract was cancelled during August, with most of those cancellations resulting from low appraisals.

The National Association of Realtors reported this week that 18% of deals under contract were cancelled in August, up from 16% in July and up from just 9% in August of 2010.

We continue to live in a very fear-based economy, and it’s affecting appraisers, underwriters, buyers, sellers and agents. It is more difficult today to see a transaction through from start to finish than at any time in recent memory, which is why there continues to be a massive migration of agents heading out of the business while buyers and sellers spend more time seeking out the top agents in their markets.

In short, everyone has different fears, but they are all wrestling with something

APPRAISERS are afraid of losing their standing with banks and lenders if they appraise properties which later go into foreclosure. Therefore, they appraise conservatively with a “better safe than sorry” philosophy on value and condition.

UNDERWRITERSare afraid of losing their jobs if loans they approve go into default. Therefore, they ask for more documentation, underwrite more cautiously and decline files which would have sailed through in a better market.

BUYERSare afraid of overpaying, plain and simple.

SELLERSare afraid of moving up (and often do not have the equity or job security to do so), leading to less inventory on the market and fewer homes to choose from.

AGENTShave a choice to make: either work harder, smarter and more efficiently… or get out of the business.

There’s not a lot of comfort for anyone in today’s market, but it’s the market we have and we must become comfortable navigating these uncomfortable waters.

We all have a choice - we can view this market as a burden, or we can view it as an opportunity.  We can choose to complain, or we can choose to elevate our game.  We can think about how things used to be, or we can focus on getting better each day so that we can compete and win in a market where so many others are simply quitting and leaving.