There’s no doubt that the tight housing market has an impact on buyers, but it also has important implications for mortgage lenders, too. It turns out that buyers are not the only ones having challenges in areas like Seattle. In hot housing markets like this one, there are just not enough homes to meet the demand of potential buyers.
The demand in this area and others around the country has grown dramatically in recent years, and many of these interested buyers need financing to close the deal. That is why increased pressure is put on the mortgage lending industry as well as people in the profession of appraising properties. The higher demand is also driving up prices of the homes, but there is concern about whether the lending industry can act quickly enough to process and make offers to potential buyers.
With so few homes on the market and the popularity of location only growing, many buyers are interested in moving quickly. That means that mortgage lenders are seeing more business overall, but that they are feeling the heat to provide financing and to do it quickly. Buyers in the position of potentially snapping up one of the hot properties want things done quickly.
Appraisers, too, are having a hard time keeping up with business. There are so many buyers wanting to move forward expediently and close a deal that the existing structure of these businesses means trying to handle a constant high demand. As a result, sometimes the appraiser can’t even make it out to a property until a few weeks after the request is filed, which is often way too late for a hurried buyer.
In the worst case scenario, these delays on the appraiser end or the lender end can mean a lost deal. Deals might even involve a buyer losing the earnest money put down for the house, but not every seller is sticking to these strict requirements. Some contracts allow for a penalty fine paid per day if the seller needs additional time. This only adds to the stress of the sellers, though, and this stress is passed on to the lenders and the appraisers.
Even if the seller has already received an automatic credit pre-qualification, problems can still arise. Realtors want to see a bigger picture of the buyer’s finances and overall background. This means more paperwork, more work, and likely more delays. Since lenders are now taking a deeper look at each potential buyer, this takes time but it also impacts whether someone might qualify. The system that has resulted is one with gridlock and frustration all around. Mortgage lenders are trying to keep up, and some are implementing systems to do so with greater success, but it is still not true around the country.