Regarding yesterday's post, let me tell you about the housing market in South Dade. In Homestead, in particular.
Since last May, I have been looking for a house. I looked in 3 or 4 areas, both east and west of the highway. I looked every day. I swear, it began to be a full time job.
I, too, put in at least 7 contracts. I can tell you that I lost every one of them going in with the full asking price and ALL cash. I did not mess with financing as I went to a banker friend who said I needed to come up with cash to be able to buy a house to be competitive in the current market.
As a single retiree, financing was not available... you have to be working and at a job for at least a year to be financed. Your income (that is your salary, not investment income) has to be able to cover your expenses and the mortgage. They want your bank statements and W-2 for 2 years to prove it. You have to have a decent down-payment.
If anyone lends you money to close, you have to have a "gift" letter and copies of the bank statement showing where the money came from with the account information showing.
The market jumped 10 to 20% while I was looking. Houses that were selling in May at one price suddenly jumped by August an additional $20,000 or more.
I offered full price and up to 10,000 above in several cases. I didn't get the houses WITH ALL CASH.
In one case, I offered full price, and then offered to pay $14,000 to a homeowner association and then $18,000 on the owners IRS lien. I still didn't get the house. I was offering cash transactions and instant closings.
The point is: The real estate market is not for people who are not financially mature. If you have any credit blemish and you want financing, you better be prepared to have them demand everything but your underwear size.
Out of country investors are beating out other local cash buyers. Genius reported on this Dec. 7th 2013. What we need is less foreign investors buying up all the foreclosures in bulk. Maybe you should address that up there on the dais? Maybe they need a hoop to jump through or a surcharge for bulk buying that is manipulating our market.
Homestead has become a rental market for houses. It is a section 8 haven for spectators. I bet if you look at the number of house sold for cash vs finances in South Dade, you will would be surprised at the numbers.
Everyone looking for new houses are going to have to have great credit, good jobs and lots of patience. I would not even try to purchase with financing. To buy a house with financing you have to have sound credit and a willing financier. I was to the point that I knew I could always rent with my credit history and I was getting tired of dealing with the insane market.
In the end, I was able to purchase, by grabbing a house that first I looked at in May, which the investor who had the contract walked away from. My realtor called me the morning it came back on the market and we had an offer in within hours. I won the house over a higher bid because I paid cash and the other had to be financed. I could close in a week and the home owners bank didn't want to wait on the other person to deal with the financing.
How did your daughter get that house she now has? That is the big question. REALLY BIG QUESTION. Favors? Help financing? I would like to know. Maybe all those Sweetwater Fence contracts left her flush with cash.