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Ft Lauderdale Real Estate News | South Florida Buyers Cancel Contract
18% Buyers Withdraw Their Offer
Why Are More Home Buyers Withdrawing Contracts?
According to information released by Capital Economics, although the housing market has shown consistent growth and home sales have increased, a large number of home buyers have been changing their minds on their contracts. Close to 18% of all signed contracts on present home sales were withdrawn throughout the months of May and July.
Based on data from the National Association of Realtors, 36% of real estate specialists indicate that they’ve encountered an issue with a home purchase contract. These issues vary from longer delays, cancellation of the contract, or trouble with the negotiation of the details of the purchase.
So What Is Causing So Many Potential Homeowners To Withdraw Their Intentions?
Some real estate experts believe that that stiff lending requirements have been the cause of the recent influx in cancelled contract. More and more potential home buyers have come to the conclusion that as they approach the closing process of a home purchase, they haven’t been able to get their financing approved or are hit with extensive delays in actually attaining a mortgage.
At the Henri Frank Group brokered by Remax Preferred, we have seen buyers of their South Florida home withdraw from the mortgage process. The stress of gathering the information for the mortgage originator is not the end of it either. Lynn Whitefall, Brand Manager and Senior Loan Originating Specialist for the GoldStar Financial Group added, “I counsel my clients from the very first day when we meet that buying a home in South Florida is going to require a strong commitment and obtaining the financing can require even a stronger commitment to getting to the closing.”
The lenders are now required to follow the new Dodd-Frank guidelines. Officially known as the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act, enated into law on July 21, 2010. There are many changes to the mortgage process from this new legislation. Controversy continues with this Act. Some say too much regulation of the industry where others say it was required in response to the mortgage meltdown in 2007.
So when purchasing a home and obtaining a mortgage, although it may get to high stress levels and cause you to withdraw your contract, don’t allow that to happen to you. This is why when choosing a loan specialist, research the options and be sure you choose someone who will make this part of the process easy and smooth for you. It is my experience, using an online company to obtain a mortgage where there isn’t a person who you can meet face-to-face adds to the mortgage stress. Select the Mortgage Originator who is going to take you step by step and explain thoroughly each of the forms, each of the required documents to you. Many of our clients at the Henri Frank Group in Fort Lauderdale, buying a home in Fort Lauderdale, or a condominium in Downtown Fort Lauderdale, have used the services of Lynn Whitefall. Each of them were pleased they chose GoldStar Financial.
Other real estate specialists blame the large amount of withdrawn contracts on the restricted amount of homes available on the market. Henri Vezie, Realtor in South Florida since 1999, co-founder of the Henri Frank Group and co-host of the radio show, Real Estate Roundtable with Henri and Frank believes that the limited inventory encourages some home buyers to bid higher on properties just to gain the attention of the seller. Nonetheless, once these potential home buyers have isolated themselves in the bidding war, they often reconsider the amount of money they want to spend or can afford to spend on a home. “This style of placing an offer is not the preferred way in which we encourage our buyers,” Vezie added.
Robin Passman, Buyer Agent for the Henri Frank Group shared from her recent experience, “if the home appraisal or inspection process uncovers any possible delays or major imperfections, potential buyers are more inclined to withdraw their intentions.” But we at the Henri Frank Group know that when a perspective buyer makes the decision to walk away from a contract, this doesn’t necessarily mean that they won’t purchase a home in the near future. These buyers often make an offer on another property in the future or may use this tactic to work out a better deal on the same home in the days and weeks ahead.
But it is alarming as the the 18% of the buyers cancelling their contracts is higher than last year, 2011, the same period of time. So we continue to warn our sellers in Wilton Manors, homeowners selling their condo in Fort Lauderdale or Hillsboro Shores, that the when they accept a contract with financing, until the contingency is removed, the buyer can cancel. And even with a cash buyer, the contract is not “hard”, in other words, certain until the inspection contingency and any other agreed upon contingencies are removed.
If we don’t explain this to our sellers at the time we do our listing presentation and remind them again when we present an offer, we would be irresponsible Listing Realtors. It is our responsibility, whether representing a buyer in South Florida or a seller in South Florida that we take steps that make them feel comfortable and confident. Every group member of the Henri Frank Group, from buyers agents, to our transaction processor and office manager, we make every client feel we are providing them with accurate information and bringing them to the closing table taking each step with them and their best interest in mind.
You can contact the Henri Frank Group at Remax Preferred, call or text to 954-604-9999, or email us at email@example.com
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