The Down and Dirty

Just about a year ago there was all this nervousness because lenders were tightening up on their criteria and unless you had 20% down it was going to be very hard to buy a home around here. Of course, it is harder when you have 10% or less down and you have to jump through a bunch more hoops to get a place if you’re using an FHA loan…but it is do-able. The anticipation was that most folks were simply going to have to save more money before taking the plunge and that would slow the market down since it was going to take awhile to get that big old 20% number. Right?

It sure doesn’t seem that way to me so far in 2010. What it seems like is that everybody has a ton of money! On some of my listings this year, 4 of the six offers on Dory had at least 30% down…one had 50% down. Catamaran had two offers that had 30% down. Alameda got an offer with 40% down. Many other transactions I’ve done with buyers have had them competing with other offers that have had large down payments and in many cases all cash offers have won the day.

Yesterday I presented an offer that was one of six. We had 25% down, 2 other offers had 35 and 40% down and one was all cash. Having said that, we’re not talking about small houses. We’re talking about houses selling for $1,000,000. It’s amazing how many folks have $350,000 to $400,000 to put down! In this era when appraisals have been an issue it’s comforting for a seller and thei agent to see offers with such high down payments. It, of course, is also frustrating for a buyer who has 20% down (can you imagine having $200,000 as a liability?) when they have to compete with these other folks. Even with 50% down it becomes a challenge when seemingly so many others have cash and can close in a week on a property…and then offer free rent back!

It’s becoming sort of crazy again in some market segments. Sort of like 2004, only everybody playing is very well qualified and has a ton of money!


  1. Michelle says:

    I know this well! Where do people get all this money? I was telling a friend who is an attorney, and her reaction was, “Something about this would be illegal.” Whereas, for me, based on my profession, I was thinking, “Man, gotta be nice to have mommy and daddy forking all that money over!”

  2. Are you also seeing this in a lower pricing point? Say the first time home buyer range of 5-700k? Interesting to see how much buyers from different pricing points put down as a down payment.

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