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Here's A New One: Being Too Broke To Sell

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This is what a gummed up market looks like.

Lord knows what a market with HIPs, massive overexpectation of value, ceedit crunch and larger levels of overall gearing will look like.

http://www.chicagotribune.com/business/col...,0,40543.column

Here's a new one: Being too broke to sell

Mary Umberger | Real estate

September 30, 2007

Most anybody in the mortgage business will tell you that August was a month that will live in infamy: The market was in turmoil, as doubts about the stability of subprime loans spread to other sectors of the mortgage world.

How bad was it? A survey of mortgage brokers suggests that one in three consumers who recently signed purchase contracts canceled in August -- up from just 4 percent three years ago, according to the research firm that conducted the survey for Inside Mortgage Finance, a trade journal.

The cancellation rate undoubtedly was fed by two scenarios playing out: Many buyers couldn't get mortgage approval because lending suddenly tightened; or, financially strained lenders yanked funding from their borrowers at the last minute.

But another factor was at work: Sellers -- not buyers -- were in trouble as their closing dates neared.

"Our office had four sales in one week that failed to close because the seller didn't have the cash," said the real estate agent, who declined to be identified because she feared office repercussions.

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This is what a gummed up market looks like.

Lord knows what a market with HIPs, massive overexpectation of value, ceedit crunch and larger levels of overall gearing will look like.

http://www.chicagotribune.com/business/col...,0,40543.column

Here's a new one: Being too broke to sell

Mary Umberger | Real estate

September 30, 2007

Most anybody in the mortgage business will tell you that August was a month that will live in infamy: The market was in turmoil, as doubts about the stability of subprime loans spread to other sectors of the mortgage world.

How bad was it? A survey of mortgage brokers suggests that one in three consumers who recently signed purchase contracts canceled in August -- up from just 4 percent three years ago, according to the research firm that conducted the survey for Inside Mortgage Finance, a trade journal.

The cancellation rate undoubtedly was fed by two scenarios playing out: Many buyers couldn't get mortgage approval because lending suddenly tightened; or, financially strained lenders yanked funding from their borrowers at the last minute.

But another factor was at work: Sellers -- not buyers -- were in trouble as their closing dates neared.

"Our office had four sales in one week that failed to close because the seller didn't have the cash," said the real estate agent, who declined to be identified because she feared office repercussions.

That's not new, remember negative equity in the 90s! When you can add all you moving bills to the new mortgage it's easy, once that option goes away even a few thousand pounds shortfall can stop the deal.

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That's not new, remember negative equity in the 90s! When you can add all you moving bills to the new mortgage it's easy, once that option goes away even a few thousand pounds shortfall can stop the deal.

Even at the very peak with double Miras small newbuild terrace/semis were around £60k over many parts of the UK. Transactional costs now in comparison, let lone shortfalls are huge. Now there is stamp duty (raised of course), no Miras, and inflation bursting out all over the place to boot, really can;t believe it ever got to this level of absurdity but it did.

I suppose that's how companies like NRK can go tits up overnight, the backdrop is far more extreme than the 90's.

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Guest vicmac64
Even at the very peak with double Miras small newbuild terrace/semis were around £60k over many parts of the UK. Transactional costs now in comparison, let lone shortfalls are huge. Now there is stamp duty (raised of course), no Miras, and inflation bursting out all over the place to boot, really can;t believe it ever got to this level of absurdity but it did.

I suppose that's how companies like NRK can go tits up overnight, the backdrop is far more extreme than the 90's.

good post - this is what is happening - we are now in - 'panic territory'

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That's not new, remember negative equity in the 90s! When you can add all you moving bills to the new mortgage it's easy, once that option goes away even a few thousand pounds shortfall can stop the deal.

Not to mention the extra cost of providing a homebuyers' pack on top or all the other costs of selling and settling with lender.

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dont know what the fuss is about- you just sell your property on TV- they NEVER have Agents fees, solicitors fees, bridging costs

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