PHOENIX (3TV/CBS 5) – Jordan Derego and Sam Schreir are desperately trying to buy their first home. They have good jobs and are pre-approved for a loan, but the Phoenix couple continue to be left out.
“It’s really competitive, even if we get offers,” Derego said. “We find something we like, beat the odds, and all the cash or wave inspections.”
“We’ve made a few offers, both well above demand, and we have news, no, not even close,” Schreir said.
Valley realtor Bob Hertzog with My Home Group describes the current housing market as the perfect storm hitting first-time buyers.
Home prices are skyrocketing, interest rates are soaring, and a wave of investors are outbidding young professionals like Derego and Schrier by paying everything in cash while foregoing appraisals and inspections.
“They’re really running out of the market, and for the most part the people who are driving them out of the market are what we see a lot, these Wallstreet groups coming in and buying up these neighborhoods, turning them into rentals,” said Hertzog. “They don’t care what they pay for the house, and all they care about is renting it out.”
In an effort to give buyers a fighting chance, a real estate company called Orchard has just launched a new program in the Phoenix area that will allow people to make cash offers. The company will basically buy a house from someone using all their money, give the buyer 120 days to take out a mortgage, and pay it off. Orchard CEO Court Cunningham said the program has already helped 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’s just as low risk to the seller,” Cunningham said. “No financing eventuality. No home contingency. No evaluation eventuality. “
For more details on the new program, click here.
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