Homes are listed with Realtor only information called Financing Available: The seller tells the listing agent, what kind of buyer they are willing to consider.
This information does not show up on Zillow or Realtor.com. There are 4 main choices. Cash, conventional, FHA and VA.
The seller and the listing agent, discuss the home when it is listed. If it is move-in ready, then it can go all 4 ways. If it needs work, it may not pass FHA and VA inspections, and the seller and listing agent may decide not to offer the home for those buyers.
The FHA and VA buyers are all owner occupant buyers. They all are buying a home for themselves and those homes must pass inspection.
All buyers want a good deal. Homes that need work are generally priced better than homes that are move-in ready. FHA and VA buyers want a good deal, naturally. The problem is the good deals need work and may not pass FHA and VA inspections. And more importantly are not offered to FHA and VA buyers and these buyers don't know it because that information is hidden.
So our hard working buyers agents interview their buyers and send out homes that meet their criteria, including financing. What ends up filling these FHA and VA buyers emails are retail, move in ready, fully priced homes.
Meanwhile, our FHA and VA owner occupant buyers are pulling up homes that look like a whole lot better deals than they are receiving from their buyers agent.
If they are not properly counselled by their buyers agent, they will be confused as to why they are not getting emails for these "good deals".
It gets worse for these buyers. When a new attractive listing comes out, in this market, the listing agent is getting multiple offers. The FHA and VA buyers offers are considered last. It is much more attractive for a seller to accept a cash buyer, of course. If no cash buyers are presenting offers, the seller will consider conventional buyers next. It is only after the cash buyers and conventional buyers will a seller consider an FHA of VA buyer.
This means that, in this market it is likely for an FHA buyer or a VA buyer to put in offers on lots of houses and not get a deal.
It is so bad now, that many Realtors are just not taking on FHA and VA buyers. If I get an FHA or VA buyer I counsel them to only look at homes that have been on the market for at least several weeks. The new listings are getting so much action, that it is just a big tease for an FHA or VA buyer.
THe market is currently at its tightest in modern history. Buyers out number sellers and FHA and VA buyers have few choices and then lose out to cash and conventional buyers.
Supply and demand are broken. The supply of houses is artificially reduced by the moratorium on evictions and foreclosures. The latest data suggests that 12% of all homeowners are in arrears. We are talking about millions of homes that are not part of the supply of available houses. In the old days if a seller got behind and had equity, they would sell. Now these sellers are being allowed to stay in their homes.
FHA and VA buyers: Be patient. You will get a much larger choice of homes, although not too soon. President Biden just extended the moratorium on foreclosures until June 30, 2021. It will then be 6 months or more before we start seeing these homes added to the supply.
These homes may not be readily available, but there are a lot of homeowners that will see that supply is coming and they may very well want to sell before they arrive. Buyers, realizing that supply will expand, will like not want to get involved with bidding wars, and many will likely wait for more choices. This will cool the market and give us all more choices.
Read my market report at 409home.com/themarket and email, text or call to be put on the list of clients I will be able to help a whole lot better later.