Effective October 12th, the major mortgage insurance companies will be changing their guidelines in regards to property flipping. The new requirements are:
• If the seller acquired the property fewer than 90 days from the date of the
purchase contract, the loan is ineligible.
• If the seller acquired the property more than 90 days but fewer than 180
days from the date of purchase contract, the loan requires a manual MGIC
underwrite. Form 1004 / 70 will be required.
• The following property sales/transfers are not required to meet this policy
where the seller is:
1. A lender, mortgage investor or a mortgage insurance company
that acquired the property as a result of a foreclosure
or a deed in lieu of foreclosure.
2. A spouse who acquired the property through a divorce settlement.
3. An employer that acquired the property through its relocation
program.
4. An administrator, executor, or personal representative selling
property of an estate.
What does this mean to you as a buyer?
Well if you contract for a property after this date and the property has been not be owned by the seller and does not meet one of the exceptions you simply will not get a loan on the property and you will have wasted your time and money.
If the property falls under the 90 to 180 days guidelines the seller will probably have to provide information as to the types of improvements and their costs that the seller did to the property. This will take additional time and there is the possibility that the loan will not go through.
Before you as a buyer make an offer on a property, I would recommend that you have your agent check on how long the current owner has owned the property.
The Nation Association of Realtors released their Nations Sales Report for August today and I thought it might be helpful to compared the Richardson market to the national market.
The National Association of Realtors reported sales nationally were of by 2.7% in AAugust compared to August of last year. The median price fell by 12.7% and there was a 8.5 months supply on the market.
Our local MLS numbers for August in the Richardson area show sales were flat at 0%. The median sales price declined by only 2% and the months of inventory was 2.9 months.
The Richardson market is holding up very well as compared to the Nation Market and will continue to do so as long as the supply of homes for sale remains low.
For purposes of this report north Dallas is broken into two section:. North of Northwest Hwy and south of LBJ and North of LBJ.
North of Northwest Hwy and South of LBJ:
Sales in this area in August continued to be weak. The upper price ranges are not moving. Sales were of by12% compared to a year ago. The average sales price continued to decline along with the median sales price. Pending sales showed a strong increase being up by 33%. The number of active listings was flat and we say a decrease in the months of inventory which continues to remain very high at 17.2 month.
Sales: 43
Average Sales Price: $914,178
Median Sales Price: $639,900
Pending Sales: 40
Active Listings: 614
Months of Inventory: 17.2
North of LBJ:
Sales were off again in this area of North Dallas, but we did see an increase in the average sales price of 13% and a smaller increase in the median sales price of 2%. There was a 6% decrease in the number of pending sales. The number of active listings declined by 12% helping to keep supply/demand closer to a balance. The months of inventory in this area is only 6.5 months.
Sales: 73
Average Sales Price: $349,303
Median Sales Price: $272,000
Pending Sales: 59
Active Listings: 478
Months of Inventory:6.5
In order to qualify for the first time homes buyers tax credit of $8,000 your new home must close no later than November 30th. If everything goes right you should have your new home under contract by the end of October to make the deadline. However, we know that things do not always go as planed. After you do inspections, you might find problems with the house that can not be worked out with the seller or maybe you decide that there are to many issues and terminate the contract. There might be appraisal problems or maybe the lender just keeps asking you for more information. There are many thinks that can delay a closing.
I would strongly recommend that if you are trying to use this tax credit, that you have your house under contract by the middle of October just to be on the safe side.
THIS ONLY LEAVES YOU ABOUT 5 WEEKS TO FIND THAT HOUSE!
Sales were flat in August and we saw a small decline in the average and median sales prices. Pending sales were up slightly while the number of new listings and active listings continues to shrink. Active listings fell 35% leaving us with only 225 homes on the market. This represents a 2.9 month supply.
As I have been saying now for several months, I you are looking to purchase a home in Richardson, you have very little to choose from. The best homes are going quickly! You better have a good agent that stays on top of the new listings and can get you in to see them the first day they hit the market are you will miss out!
Sales: 100
Average Sales Price: $177,123
Median Sales Price: $162,350
Pending Sales: 86
Active Listings: 225
Average Days on Market: 52
Months Inventory: 2.9
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I'm a Dallas area native. I graduated from Richardson High School and Southern Methodist University. I have been a real estate broker since 1975 and with Ebby Halliday, Realtors since 1987.
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