• Traditional sellers are finding that the number of offers received is not nearly as high as those received on REO properties, which often receive multiple bids. The negotiation process also differs between traditional sellers today and traditional sellers during the height of the market. According to one REALTOR®, if a house is not being shown, then it is overpriced. The record number of foreclosed homes on the market gives buyers even more leverage.
• Resulting from the credit crisis, lenders now often require much more paperwork and thoroughly review borrowers' credit histories, bank statements, tax returns, and job histories. The average mortgage applications today starts three times thicker than what it was at the start of the housing boom, and often gets thicker as the process moves along. One mortgage broker reports that now lenders want to know everything about the buyer, "It's a true and full underwriting process on every particular loan."
• It is not uncommon nowadays for closings to take 60 days. One reason is because of the adoption of the Home Valuation Code of Conduct (HVCC), which often results in appraisers evaluating homes in areas they are not familiar with and often using comparables that are inaccurate. This has caused delays in closing sales, and in some cases, undermining sales because appraisals are coming in too low.
• Just about everyone in the real estate industry agrees that another dramatic boom-bust cycle isn't going to happen again anytime soon. Albert Saiz, assistant real estate professor at the University of Pennsylvania's Wharton School, expects that new regulations and a different consumer mind-set will help real estate return to a more traditional cycle.
