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Sellers Worry about Buyer Credit Availability in Redfin Survey

by devteam February 5th, 2014 | Share

Now that prices have recovered to withinrnstriking distance of where many folks purchased their homes, potential sellersrnhave found something new to worry about. rnCan their potential buyer get a mortgage?</p

Redfin surveyed nearly 500 of its sellerrnclients in 22 metro areas across the country and found that, while more sellersrnfeel this is a good time to market their homes, the percentage of sellers whorncited “buyer financing trouble” as a top concern rose 5 percentage points fromrnthe previous survey to 29 percent. rnRedfin said these concerns likely reflect higher home prices and risingrnmortgage rates which have harmed affordability and the stricter lendingrnregulations that went into effect in January.</p

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Therngeneral state of the economy remains among seller concerns but has dropped in intensityrnsince the last survey.  The percentage of sellers choosing that option fell to 26rnpercent from 39 percent in the fourth quarter when Redfin says some sellersrnwere worried about the U.S. government shutdown and the debt ceiling fight.  Sellers also worry about whether an appraisalrnwill reflect the ultimate selling price.</p

More sellers who responded to Redfin’s firstrnquarter 2014 survey view this as a good time to buy a home than did so in thernfourth quarter of 2013 with positive responses rising from 34 percent to 38rnpercent.  Only 22 percent had viewed thernoutlook as a good one for selling in the first quarter of 2013.  </p

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Sellers are also looking beyond thernsale of their existing homes and worrying about whether they will be able tornbuy their next one.  The question aboutrntrouble financing cuts in both directions as sellers worry about being unablernto get a mortgage or about rising rates impacting the affordability of their newrnhome. Eleven percent said interest rates were a key factor in their decision tornsell and another 41 percent said rates were “somewhat of a factor”.  Another seller concern is whether low inventoriesrnin many areas will mean aggressive competition for desirable properties.  </p

The new question added to the currentrnsurvey asked why sellers were planning to move. rnForty-four percent said they hoped to move to a nicer or larger homernthan the one they were selling, 29 percent wanted to move to a differentrnlocation.</p

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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