Buyer must feed squirrels

From the NYT:

In a housing market starved for inventory, buyers are stepping over one another to bid on desirable properties. But a high bid may not be enough — sellers are also seeking offers without mortgage contingencies.

Usually included in a sales contract, a mortgage contingency gives buyers the option of backing out if they can’t obtain financing within a specified period. And if they do back out, they can take their down payment with them.

But the combination of a competitive market and a difficult lending climate has made sellers in New York less amenable to such conditions. They want noncontingent or all-cash offers.

“When you have a market that’s heating up,” said Marc Israel, the executive vice president of Kensington Vanguard National Land Services, a title insurer, “sellers feel emboldened to say to buyers, ‘I’m not going to give you this clause because I don’t want to take the risk that you can’t get your mortgage.’ ”

The stance makes perfect sense from a seller’s viewpoint. When the market is hot, added Mr. Israel, a continuing education instructor for real estate lawyers, “the last thing sellers want to do is tie themselves up with a buyer for some extended period of time just to have the buyer cancel the contract.”

For buyers, however, signing a contract without a mortgage contingency is risky. If their financing was delayed or denied, they could forfeit their down payment.

Given the typical 10 percent down payment in New York, “you’re talking about a very significant amount of money at risk,” Mr. Israel noted.

In such a competitive market, buyers who need financing may find themselves up against those able to pay in cash or put at least 50 percent down, said Peggy Aguayo, an executive vice president of Halstead Property. It is not uncommon for high bids to be passed up for slightly lower bids that are noncontingent or all cash.

“A typical buyer with 25 or 30 percent to put down” Ms. Aguayo said, “if they don’t waive that contingency, the seller will go with someone else.”

The problem can be discouraging. Some of her buyers have decided to pull out of the market altogether until inventory loosens up.

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11 Responses to Buyer must feed squirrels

  1. Grim says:

    Happy Mothers Day!

  2. 1987 Condo Buyer says:

    Williams Paving for repaving driveway…..based on Libtard rec., I called these guys and while they were competitive but not cheapest, their process was NOT to leave the gravel sit for a few weeks but rather rip out driveway, lay gravel and immediately asphalt it. Is that the standard or best practice? In the past the contractors insisted on letting the gravel “settle”..not sure if that is just something that fits their schedule better. Any input is appreciated. Thanks!

  3. Grim says:

    I was always under the impression that crushed stone base should always be mechanically compacted. I see no reason that a few days time will do anything at all, as stone will not compact on its own, at least over our lifetimes.

    Waiting a few days? Sounds more like a techique to schedule jobs more efficiently. I know these guys like to buy their asphalt in bulk an try to lay as much as possible in a single day.

  4. 1987 condo buyer says:

    Thanks, that’s what was thinking might be the reason….

  5. Nomad says:

    1987

    gravel should be laid down, raked level and then immediately compacted with the same roller they use on the asphalt itself. Make sure they use more than one of those hand controlled / vibrating compacters as those obviously don’t do the same job as a 3000 lb roller.

    After gravel is compacted, asphalt should be immediately put down and compacted.

    Problem will arise if they put down gravel and let it sit for a few days / weeks. Moisture / rain on gravel is sealed in once asphalt is laid down and during a hot summer, moisture vaporizes and needs to escape which means cracks in your new driveway. I had it happen and had a nice fight w paving company to redo.

  6. The punch bowl will never willingly be removed by the Fed.

    It will, however, be taken away by Mr. Market. And it won’t be pretty when it happens.

  7. Libtard at home says:

    I never had them rip up the old one because both were in halfway decent shape. Did have a little pea stone fill in a bad area on my multi though. I hope you negotiated the price with them. I have always been able to get about $300 to $500 off their number (finals both worked out to $1 per sq. foot). Though no removal involved. Don’t forget to seal it.

  8. Anon E. Moose says:

    Grim,

    This post is a trick, right? NYT dateline 2005, maybe?

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