FHA Financing Works for First Time Home Buyer
Posted by Leslie Eskildsen on Thursday, August 27th, 2009 at 9:55pm.Orange County First Time Home Buyer FHA Success Story
After putting in 18 offers on other homes in Orange County, Toriana was finally successful in buying a huge 3 bedroom condo using FHA financing. And to top off the success story, the condo was an REO property. Read on to find out what led to Toriana's success and some of the hurdles along the way!
To begin with, the Real Estate market in South Orange County, Ca has seen a shift in the second half of 2009 - a shift toward a sellers market. No, I take that back, shift is too benign a term - the market has actually catapulted into a sellers market. Low inventory levels (meaning not enough homes for all the qualified buyers) has caused fierce competition - 10 to 20 to even 30 or more offers on the same home.
You have heard me talk about this before - when you get that many offers, typically you are up against at least one all cash offer, some with 50% down, a ton with at least 20% down, and many over the list price. This makes an FHA buyer, who is only required to put down 3.5%, and has to withstand a more rigerous appraisal process than any other financing (except VA) to secure the loan. Add to that the higher level of scrutiny and due diligence the lenders are currently requiring, and you have a recipie for disaster for an FHA buyer in the $500K and below market - at least here in South Orange County.
So how did Toriana and I pull it off, you are asking - with this much stacked against her? Well, here's how we did it. Check out the Top Ten Reasons Toriana was Successful
1. She made an offer the day the house came on the market - the first one in
2. She never saw the house before putting in her offer - I looked at it for her and said we were making an offer
3. She offered over the asking price and agreed to make up the difference if it did not appraise
4. We use electronic signatures - through DocuSign - so we did not have to interrupt her work or delay the process - after 18 other offers, it took her 40 seconds to sign and send back to me.
5. She was prepared - she had her Pre-Approval letter, her deposit check, and her proof of funds.
6. I had all of her financial information already in PDF format to attach to the offer
7. I emailed her offer to the listing agent
8. I called to sell him on her qualifications and abitliy to perform - Realtor speak for "she's the real deal and will make this happen - I swear"
9. I made sure her lender agreed that he could close in 30 days - a bank requirement
10. Communication Communication Communication
And she lived happily ever after............... in her new condo in South Orange Couny, California!
So, next time we check in on this story, it will be about all the things that went WRONG and yet Toriana still emerged victorious in the current battle between buyers!! Click below to hear what Toriana has to say!
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