Today the savviest home buyers in El Paso are using cash sales to cement a deal. Others are contacting their lending institutions and asking for “Pre-Approval” prior to starting their house search. The current market is pushing more and more home buyers into this pre-approval mode because the competition for quality homes in El Paso is greater than the supply. House buyers are finding themselves in competition with each other and many times the “faster” buyer is the one who closes on the home. The “fastest” buyers are the ones that have sufficient cash in their bank accounts to make the home purchase. These buyers have no need for a lender or any pre-approval.
Adding to the motivation for pre-approvals is the fact that banks and other mortgage lenders are dealing with more restrictive lending rules – this being the result of the outrageous, greedy, and fraudulent lending and foreclosure practices from the “sub-prime” era. Today a home mortgage requires more than being alive and able to sign a few documents. To qualify for a mortgage buyers actually have to be able to document their income and have a down payment in today’s “stricter” lending environment. Take advantage of free information sources.
Pre-approvals are also driven by the fact that many sub-markets in El Paso have seen double-digit price increases in home values. This creates the incentive for buyers to buy more quickly before their “house prospect” has any additional price increases. The final pre-approval letter also gives home buyers the upper limit of lending that is available and aids them in not spending too much or buying out of their affordable range of homes.
El Paso’s home sellers have seen these recent price increases in other homes and when they put their house on the market they are asking for “top dollar.” This combined with the earlier mentioned imbalance in supply and demand will probably fuel price increases for the next few years. Local classified and online ads have numerous “Sell my House Fast” advertisements and they are an indication of “hot” real estate market.
Remember, cash is king. Buyers can buy “faster” with cash and sellers love the certainty of a cash transaction. However, if you don’t have cash then a pre-approval letter from a lender is the next best situation. Good Luck.