Real Estate Article: It is the Perfect Opportunity for Low Down Payment Buyers!
08/16/2004

     Ever since the beginning of the millennium, the housing market has sky-rocketed dramatically. This has caused low down payment buyers to be incapable of purchasing a home. Although sometimes those buyers have higher offers than other buyers, the sellers still do not accept them. However, I am happy to report to you that times are changing. We are now at a time where it does not matter whether you are a 100% financing buyer or just a buyer with less cash in hand, the seller will carefully consider your offer.

     I believe that most buyers have tried to bargain for a lower price from the seller. Others have tried making up for their low down payment with a higher offering price, but unfortunately without much consideration, the seller refuses. These experiences are common for buyers in a seller’s market. During the sellers' market, an experienced listing agent will recommend their clients to reject low cash buyers even if their offers are a bit higher. This is because banks are more likely to refuse a request for loan from a low down payment buyer due to inaccurate appraisals. This ultimately causes a failed escrow. In order to avoid those complications, sellers will avoid low down payment buyers altogether and only consider buyers offering down payments 20% or more.

     In my opinion, a very good method to analyze the market is through statistics. My beliefs and conclusions have been based on numbers and facts. During July 2003, Diamond Bar had 107 and Chino Hills had 134 estates successful in transaction. This passing July, there was only an average of about 80 estates successful in transaction for the two cities. The listing inventories of Chino Hills and Diamond bar last July was 120-150, this year it has increased to 300 for Diamond Bar and 350 for Chino Hills. The numbers not only shows the slowing down of the market, it also shows that the number of buyers has decreased. The statistics we see now reflect the status of the market back in May and June since the transaction process last for about 2 months after the initial sale. The situation of the market now makes it a great opportunity for down payment buyers. The following are three reasons why that is so.

1. Prices are dropping which gives buyers more bargaining power, whereas before as soon as a buyer attempts to bargain, the seller goes to another buyer.
2. The large selection of estates on the market can be said to be largest volume in history. Buyers have a variety of houses to choose from.
3. Appraisals are no longer an issue due to the drop in prices so banks will be more likely to approve a request for loan from a low down payment buyer. Knowing this, sellers will no longer reject low cash buyers.

     If sellers are rushing to put their homes on the market, the increase in inventory will cause prices to drop. If sellers are putting their homes on the market as a result of intelligent, calculated decisions, then it is not my place to tell you whether prices will rise or fall, it depends on our economy and other environmental factors. All I’m saying is that due to increased inventory, prices are dropping and those who were unable to purchase homes in the past will stand a better chance now.

Close Window

Serving Areas: San Bernardino County (California), Riverside County (California), Los Angeles County (California)
Serving Cities: Chino Hills, Chino, Eastvale (Corona), Walnut, Diamond Bar, West Covina, Rowland Heights.
#1 Realtor, Chino Hills #1 Realtor, Chino Valley Local Top Agent, Chino Hills Real Estate Specialist,
Chino Hills Real Estate Professional Realtor.