Bankrate.com
News & Advice Compare Rates Calculators
Rate Alerts  |  Glossary  |  Help
Mortgage Home
Equity
Auto CDs &
Investments
Retirement Checking &
Savings
Credit
Cards
Debt
Management
College
Finance
Taxes Personal
Finance
 

Who might buy your home?

Page | 1 | 2 | 3 |

The three kinds of buyers whose numbers have definitely dropped in the past six months?

- advertisement -

Investors, low down payment loans and "jumbo" mortgages -- mortgages of more than $417,000, says Don Vecchiarello, communications manager for Wachovia.

"As the secondary market has died, there is less appetite for people who are purchasing investor properties," says Vecchiarello. Likewise, banks, which often resell their mortgage loans, are finding fewer takers for jumbo loans.

"A few years ago, people were buying things to flip and sell," says Barbara Alexander, broker/owner of Howard Hanna Premier Properties in Morgantown, W.Va. "In that, I've seen a slowdown."

And with tightening lending standards, many banks want to see higher down payments.

"We're typically looking" at 20 percent, says Vecchiarello.

Whether it's those more stringent standards or the tightening market or both, lenders are seeing a drop in mortgage applications. "What we're seeing is that there hasn't been as much volume, and I think it's an industry-wide trend," Vecchiarello says.

He doesn't believe that first-timer homebuyers are being impacted disproportionately.

While the mix of buyers is similar, the number of actual buyers is lower, he says.

"There has been a lower volume across the marketplace," says Vecchiarello. But "I think we're seeing a similar percentage of what we always see."

How homebuyers have changed
With more selection and better prices in many areas, sellers and agents have noticed that buyers are getting much more discerning.

"There's more selection now than ever before," says Pat V. Combs, vice president of Coldwell Banker AJS Schmidt and immediate past president of the National Association of Realtors.

Working with one couple recently, she pulled up 200 listings in their price range and areas of choice -- double what might normally be available.

As a result, "we're very selective now in what we're pulling out," she says. "You can't see 200 houses."

One the buyers quickly eliminated: a beautiful home that happened to be pink. With so many other options on the market, the buyers didn't want to bother with paint.

"The seller today has to really be cognizant of the fact that people are eliminating them," and, in many cases, before they even see the home, Combs says.

Kelli Myers, who bought her first home with her husband in January, agrees.

"There's no reason to settle," she says. "It's such a huge investment, you should really try to get what you're looking for."

Some of the major filters for buyers: condition and location.

Two years ago, with a shortage of new homes in the Morgantown, W.Va. area, "everything was selling," says Alexander.

Now, with more properties on the market and more new homes in the area, buyers are demanding homes in top shape. "When the market starts turning, they'll choose condition first," she says.

Buyers are also passing up "almost perfect" or "I could live with this" in favor of searching longer to find the home that will really match their wish list.

 
 
Next: "Many buyers ... are being more careful in choosing a home."
Page | 1 | 2 | 3 |
 
 RESOURCES
Get our free consumer update each week
Seller: Get home inspected
Creative financing might home sale
 TOP REAL ESTATE STORIES
How to lower your property taxes
Forged signature puts kibosh on home sale
Will mortgage assumption solve crisis?
 

Mortgages
Compare today's rates
NATIONAL OVERNIGHT AVERAGES
30 yr fixed mtg 4.32%
15 yr fixed mtg 3.36%
5/1 ARM 3.37%
Rates may include points
RELATED CALCULATORS
  Calculate your monthly payment  
  How much house can you afford?  
  Fixed or adjustable rate: Which is right for you?  
VIEW ALL  
FINANCIAL LITERACY
Rev up your portfolio
with these tips and tricks.
- advertisement -
- advertisement -
About Bankrate | Privacy Policy/Your California Privacy Rights | Online Media Kit | Partnerships | Investor Relations | Press Room | Contact Us | Sitemap
NYSE: RATE | RSS Feeds |

* Mortgage rate may include points. See rate tables for details. Click here.
* To see the definition of overnight averages click here.

Bankrate.com ®, Copyright © 2014 Bankrate, Inc., All Rights Reserved, Terms of Use.