1st time buyers have awakened only to find themselves in a world of multiple offers. But there are some checks and balances in place to ensure that buyers are not back in frenzied buying cycle.
It's been a busy time for buyers these days. The 1st time buyer segment of the market is HOT, HOT, HOT! Short sales and bank owned properties are selling in days with multiple offers provided they are remotely habitable...and I mean remotely! What does this mean for buyers?
Well, you can still be aggressive but now a little bit of reality needs to get mixed in because you are competing with investors who are cash heavy.
For buyers a house is still worth what you are willing to pay as long as it appraises. Good news is, there are some regulations in place that will prevent frivolous appraisals that indicate an inflated value of a home. As of May 1st, a lender may no longer call the appraiser, whom he has been working with forever, to order the appraisal. It is a more systematic cue of appraisers and a processor will make the order and then the appraisal is done without any conversation with the actual loan broker. While I do admit that I appreciate my appraisal relationships, I am a fan of some of the regulation because it will prevent that crazy market when homes were selling 100's of thousands of dollars above list price. Sometimes rules are good! Even if a buyer who was pre-approved wanted to offer above market value, the appraisal would not support that decision. A buyer working with all cash however, can spend it as they choose as they do not require an appraisal to complete the purchase. There is a great phrase that is true for many crossroads but I find it to be especially pertinent in regards to the emotional process of buying a home: "The definition of failure is giving up what we want for what we want NOW!" Now that some balance has been restored in our market, buyers can get what they truly want and enjoy the long term benefits of home ownership.
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