subject: Determine The True Valuation Of Your Home Before Putting It On The Market [print this page] There are many factors contributing to the challenge of selling a house in the current marketplace. You can see why some sellers seriously consider selling a home for cash in order to avoid the challenges altogether. They call a real estate investor who can close fast and pay cash and they are on their way. But you may not be in a position to select that option because selling a home for cash isn't for everybody. You may be looking at the various challenges and finding your way through the maze as you prepare to sell a house.
Let me explain the challenges in greater detail now. First there is the quite obvious fact that there are a lot of homes on the market right now. In fact, on some blocks in many cities there are several homes for sale in a row. That makes it more difficult for any one particular home to stand out from the crowd. Besides the fact that the market is overcrowded, there is another serious issue that is not immediately apparent. Until a seller goes all the way through the marketing process and is waiting for a sale to close, he or she may not become aware of the big issues relating to buyer financing. Since most buyers need to obtain a mortgage to purchase a home, these issues affect nearly every seller, with the exception of those who are selling a home for cash.
The issues can be lumped into one main category, although there are quite a few separate issues involved, and that category is valuation. The valuation of a home for the purposes of obtaining a mortgage loan is a very complex calculation that has elements that are mandated by the federal government and now, somewhat recently, it has elements that form an "overlay" of enhanced requirements placed on each borrower by each private lender. In other words, as the mortgage application and approval process proceeds, week-by-week for any particular borrower, the requirements may change. These changes can literally ruin a borrower's chances of obtaining his mortgage loan, ruining the sale as well.
Lenders are constrained by federal requirements on one hand, and in some cases state requirements as well, and of course they are always looking for a way to tack on additional fees for their own benefit, but those are not the basic problem I'm describing. It is caused more particularly by the loan-to-value ratios required by lenders on the secondary mortgage market. That's the real problem facing lenders who will eventually sell their loans on the secondary market and need to comply. So, knowing this, more and more sellers are choosing to avoid the issues altogether by selling a home for cash to a real estate investor.
