Buy low sell high, an enduring example of self evidence whose principle remains sound and whose execution remains complicated. In specific reference to the current real estate market, many people desire to buy, but find obstacles that prove frustrating and disheartening. The last two weeks of my personal experience leave me especially sympathetic to buyers using FHA financing.
In general terms the FHA loan is fantastic for eligible buyers, however with the piranha-like competition in entry level housing, those buyers find themselves handicapped by the lagging assessments of the bank assigned appraisers. Of course, the appraiser as an individual has little control; they simply take data, insert it into a formula and report the results. The formula, however, demands examination.
A significant flaw in the appraisal approach is the assumption that we are in a declining market. If indeed the market is declining, how is it possible that (at least in the Temecula area) a full priced offer seems intensely optimistic when facing up to seventy offers in an attractive listing’s first week on the market. So what course can a FHA buyer take? I would suggest pursuing some short sale listings, keeping in mind that the bank does not control which offer a seller submits to them. So, an informed agent may advise the seller to pass over an exceptionally high offer for one that is closer to the suspected appraisal value. While any buyer using financing still faces clear disadvantages when compared to an all cash offer, the order of events in a short sale help to level the playing field to some degree.
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