PHOENIX (3TV/CBS 5) – Jordan Derego and Sam Schreir are trying desperately to buy their first home. They have good jobs and are pre-approved for a loan, but the Phoenix couple keeps getting shut out.
“It’s really competitive, even though we get offers in,” said Derego. “We find something we like, we’re beat out by all odds, and all cash, or waving inspections.”
“We’ve made a couple offers, both significantly above asking, and we hear back, nope, not even close,” said Schreir.
Valley real estate broker Bob Hertzog, with My Home Group, describes the current housing market as the perfect storm that’s hurting first time buyers.
Home prices are sky-high, interest rates are climbing, and a wave of investors are outbidding young professionals like Derego and Schrier by paying all cash while waiving appraisals and inspections.
“They’re really getting run out of the market, and for the most part, the folks running them out of the market are what we’re seeing a lot of, these groups from Wallstreet coming in and buying these neighborhoods up, turning them into rentals,” said Hertzog. “They don’t care what they pay for the house, and all they care about is that it will rent.”
In an effort to give home buyers a fighting chance, a real estate company called Orchard just launched a new program in the Phoenix area that will allow people to make all-cash offers. The company will basically buy a home for someone using all cash, give the buyer 120 days to set up a mortgage, and pay them back. Orchard CEO Court Cunningham said the program has already assisted buyers in other cities like Atlanta, Seattle, and Houston.
“We’re leveling the playing field to allow you, the average consumer, to make an all-cash offer that is every bit as low risk to the seller,” said Cunningham. “No financing contingency. No home contingency. No appraisal contingency. “
For more details on the new program, click here.
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