“The underwriting has really tightened up,” Olson says, “Before, if you could fog a mirror, you got a loan. Now, that’s not the case.”
Nationwide, practitioners say they are encountering more potential buyers who can’t get financing.
“Buyers come in with confidence, and once they have talked with a lending practitioner, it’s like they’ve been hit over the head with a ton of bricks,” says Dean Moss, an agent at Keller Williams Fox and Associates Realty in Chicago.
A study conducted using data from a Reno, Nev., multiple listing service, found that about 30 percent of sales haven’t closed after 90 days. Practitioner Guy Johnson, who analyzed the data, suggests that buyers stay on top of their loans, checking in with their lender frequently to make sure the loan for which they’ve been approved is still the same.
“A loan commitment letter,” he adds, “isn’t really as solid as it once was.”
Source: USA Today, Anna Bahney (08/05/2008.