Wednesday, July 30, 2014
PLACERVILLE, CALIFORNIA
99 CENTS

Its taking more time when working with todays homebuyers

By
February 22, 2010 |

Democrat columnist

Working with homebuyers today is taking longer than it used to. My last sale was to a couple I had been working with for eight months. My new escrow is to a family I first met six months ago. From the time of my first meeting with a potential buyer until closing, can easily be four to five months. I have been thinking either my sales skills have rusted over the winter or this is another sign of the times.

A few years back it wasnÕt unusual to be talking with someone about buying a home and have them in an escrow in a week. The home buying, loan qualifying, inspection and appraisal process flowed as easily as the American River into Folsom Lake. It was ordained destiny. Nothing impeded the process. When a buyer wanted to be in a home in 30 days, it would happen. Brokers, lenders, appraisers and escrow were in complete harmony. My fastest closing was in 2005 to a lady from San Jose who was recently divorced and had sold her home. We met for coffee at 10 a.m., previewed five houses before noon and had an accepted all cash offer by 4 p.m. that closed eight days later. Things have changed a bit since then.

Real estate agents find themselves spending more time with buyers than we used to. One reason is the demographics have changed. More than half of all buyers today are first-time entry-level buyers. A few years ago when the average price for a home in El Dorado County was $500,000, first time buyers couldnÕt afford this county. The typical profile for county homebuyers then were mostly relocating transplants who had sold their home in another county and were bringing a bundle of cash with them. They were experienced home shoppers, understood the process and made decisions quickly.

There is a great deal of personal satisfaction in working with first-timers. They are enthusiastic about the home buying process; they donÕt have out-of-control egos and they follow directions. But they also have issues. Many have limited credit or employment history, they are usually short on savings and often have other priorities in their life, which delays their decision-making capacity. Buying a home is a series of many uphill steps requiring more commitment than browsing through pictures of homes on the Internet. Generation X (born between 1965 and 1980) move at their own pace.

Not only has the buyer profile changed but so has the level of confidence in the idea of home ownership. Most of us 75 million baby boomers (1946 Ð1964) believed owning a home was a key part of living the American Dream. Real estate was a rock solid investment that steadily appreciated 4 to 6 percent each year. Oh, there were occasionally market setbacks but property values always bounced back quickly. We believed that everyone should own a home. It was nearly a national entitlement. Both major political partiesÕ platforms enthusiastically endorsed federal efforts to increase the percentage of home ownership.

Today a growing segment of consumers is questioning those beliefs. Home ownership is like marriage and having a family isnÕt all that important. It may take years before this group gets off the sidelines and decides to buy a home and some never will. The percentage of homeownership is expected to decline from its high of 69 percent to 62 percent. Friends and relatives, who were once supportive of young couples buying a home a few years ago, often greet the news with skepticism today.

The type of properties being sold today increases the time agents are spending with their clients. Short sales are notorious. Once a buyer makes an offer on a short sale it could take months before getting a response from the lender. REOs are Òfast respondersÓ but the discounted price of an REO attracts many offers. Buyers and their agents often find themselves in a multiple offer situation and often many times on different properties. Getting an offer accepted on the right REO could take months. Buying new construction is another delay. Builders have little standing inventory available and are reluctant to start a new one until a contract is signed.

Financing also takes longer. Thirty days was pretty common to process a loan from start to finish through most of 2007. The appraisal could be finished within a week of ordering and underwriting guidelines were consistent. Today, 45 days to process and close a loan is considered warp speed. Loan guidelines are changing daily. A borrower who was pre-approved yesterday can be declined for the loan weeks into the process simply because an investor changed their guidelines. New disclosure regulations often delay ordering the appraisal and the multitude and redundancy of disclosures is confusing to borrowers.

The sheer volume of paperwork in a home sale is overwhelming. ItÕs actually surprising that anything closes. If buyers and sellers took the time required to read and understand all the documentation that agents, lenders, inspectors and escrow officers are shoving at them, nobody would ever move. IÕm not advocating going back to two-page purchase agreements but everyone read the old two-page contract. Nobody reads 10 pages of six-point type and then the 142 pages of disclosures, reports, disclaimers, instructions and addenda. The irony is that the more information is provided, the less it is understood. In order to manage the flow of documents, real estate agents and companies hire full time transaction coordinators who monitor the endless flow of recycled trees.

Traditionally, customer calls would turn into sales within weeks. Today, many of my new contacts wonÕt be in escrow until 2011. IÕm betting I will be around.

Ken Calhoon is a real estate broker in El Dorado County. He can be reached through his Website www.kencalhoon.com.

Comments

comments

.

News

District 2 candidate statements tell of goals

By Dawn Hodson | From Page: A1

 
Sand Fire nears containment: 66 structures destroyed

By Cole Mayer | From Page: A1 | Gallery

 
Tails wagging over dog park approval

By Julie Samrick | From Page: A3

Quarter-acre fire in Kelsey

By Rebecca Murphy | From Page: A3

 
Schedule for Highway 50 blasting closures

By News Release | From Page: A3

.

Opinion

My Turn: Privatization of public services

By Mark Belden | From Page: A4

 
Policy book

By Mountain Democrat | From Page: A4

 
.

Letters

GDPUD management report

By Letters to the Editor | From Page: A5

 
District 2 supervisorial special election

By Letters to the Editor | From Page: A5, 4 Comments

Piano replaced

By Letters to the Editor | From Page: A5

 
Comments sign-in policy

By Letters to the Editor | From Page: A5, 1 Comment

Save the Guinea Worm

By Letters to the Editor | From Page: A5, 1 Comment

 
Large bangs

By Letters to the Editor | From Page: A5, 2 Comments

Private property gets no respect

By Letters to the Editor | From Page: A5, 2 Comments

 
.

Sports

Ex-Bruin lends a helping hand

By Steven Shaff | From Page: A8 | Gallery

 
Sierra Sharks finish middle of the pack

By Democrat Staff | From Page: A8

Roundup: July 29, 2014

By Democrat Staff | From Page: A8

 
Taz pull through for SSL trophy

By Patty Pope | From Page: A8

.

Prospecting

Nuns discover a pleasant place

By Lexi Boeger | From Page: B1 | Gallery

 
Bargains can be found everywhere

By Democrat Staff | From Page: B2 | Gallery

At a glance: Game time

By Mimi Escabar | From Page: B2

 
Barbecue dinner to benefit Blue Star Moms

By Mount Aukum Winery | From Page: B2

Stagecoach story takes riders on a trip

By Wendy Schultz | From Page: B3

 
Help needed to make cool ties

By Sew 4 | From Page: B3

Stroke and osteoporosis screenings planned

By Life Line Screening | From Page: B3

 
Gold Rush Days activities cancelled this year

By Sacramento Convention And Visitors Center | From Page: B4

Master Food Preservers: Tomato time

By Monique Wilber | From Page: B4

 
Build an author platform at the Library

By El Dorado | From Page: B5

 
Sacramento area museums offer summer fun

By Sacramento Association Of Museums | From Page: B5

.

Essentials

Weather stats 7-29-14

By Michael Raffety | From Page: A2

 
Building permits 6/2-6/2014

By Michael Raffety | From Page: A2Comments are off for this post

Crime Log: July 17

By Cole Mayer | From Page: A2

 
.

Obituaries

Lisa Oliver Rose

By Contributor | From Page: A2

 
Wallace Murrel Thomas

By Contributor | From Page: A2

Merlyn Wilbur Adams

By Contributor | From Page: A2

 
.

Real Estate

.

Comics

.

Women’s Health

Love the skin you’re in

By Noel Stack | From Page: WH4

Dump stress and improve your health, productivity

By Wendy Schultz | From Page: WH7Comments are off for this post

Women’s Health Expo

By Marshall Medical | From Page: WH8

Find the confidence you need to fight back

By Special to the Democrat | From Page: WH12

Our choices directly affect our health

By Special to the Democrat | From Page: WH14

They’re NOT your mother’s hearing devices!

By Marshall Medical | From Page: WH17