January 26, 2012
We just listened to the President’s State of Union speech and heard the promise that the Fed will not increase the interest rate. This is good news for homebuyers when competing offers with all cash buyers.
For buyers who need to get financing for their purchase of property, they should start the loan application earlier in the process. Due to the lower interest rate and more ensuing re-financing, the banks usually take longer to process the applications, loan documents and the actual funding.
Yes, this may sound unreal in the time of recession. However, due to low inventory in areas from Saratoga to Los Altos and Palo Alto, an active buyer may be writing an offer on a property with few other offers. In fact, these areas have had such phenomenon for a while. In many cases, buyers who need financing have been competing with cash buyers.
One issue that’s hard to change is the time for closing. Many cash buyers can close a transaction in 3 days after approving the conditions and title of the property. Normally lenders cannot do appraisal, issue loan documentation and fund in such short period of time. To expedite the closing time, buyers can start going through the loan process and save time for funding. This will increase their bargaining chip in the event of competing with other buyers for the property of their dream.
Owning a home in Silicon Valley is not an easy task. The local market of supply and demand, especially in west side of the Valley, is not in sync with the rest of the country's economical situation. The extreme of low supply and high demand has made purchasing a home in Silicon Valley very competitive and sometimes tricky. In this blog, bits and pieces of market phenomenon are presented for your information.
