Why Seller’s are Reluctant to Sell – A Potential Solution

Bridge-Loan-Customer-largeRecently, I blogged about how “SMOKING HOT” the Bay Area Real Estate market has become. Low Interest Rates and extremely low Inventories of Available Homes are the culprit. Further, this HOT Market is not likely to change in the foreseeable future. The typical scenario looks like this; 1) Sellers lists their home, 2) Listing Agent does a little marketing (Sotheby’s does a lot), 3) Listing Agent sets a date to receive offers, 4) A ZILLION frantic buyers submit an offer, usually with one or more submitting an All Cash Offer and 5) The home sells for thousands over asking. In Central Contra Costa the “over asking” amounts range from $30K to $50K and on occasion $90K to $100K. This is GREAT for Sellers. But when these same Sellers become Buyers, IT’S NOT SO GREAT. The fear of NOT having their destination home in hand before they sell results in Reluctant Sellers. This in turn keeps the inventories of available home low. So the vicious cycle continues.

There is a Potential Solution:

The following may sound like an “INFOMERCIAL”, but please read on. Just a few days ago, my preferred lender, Chuck Scoma with RPM Mortgage told me about a new and different kind of Bridge loan for sellers who want to buy their new home (Non-Contingent upon the sale of their current home) before listing or selling their current home.

Bridge loans have been around for a long time.  They were rarely used because they were expensive and most Sellers didn’t want to deal with 3 payments (their current mortgage, a bridge loan payment and a new house payment).

Here are some of the details of this new Bridge Loan product:

  • Loan amounts from $200K to $400K
  • Fixed Rate of 2.99% (no, you’re not dreaming)
  • 2 points (not out of  pocket until you sell)
  • Full appraisal of your current home required
  • Current Home must be listed within 10% of appraised value
  • 6 month term for the  Bridge Loan
  • See the flyer above

There are other terms that I don’t consider unreasonable, but should be discussed with a Loan Officer or Chuck at RPM Mortgage.  This solution is not for everyone, but there are a lot of homeowners that will consider this manna from heaven.

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