February 6th, 2014 7:10 AM by Jackie A. Graves
Now that prices have recovered to within striking distance of where many folks purchased their homes, potential sellers have found something new to worry about. Can their potential buyer get a mortgage?
Redfin surveyed nearly 500 of its seller clients in 22 metro areas across the country and found that, while more sellers feel this is a good time to market their homes, the percentage of sellers who cited "buyer financing trouble" as a top concern rose 5 percentage points from the previous survey to 29 percent. Redfin said these concerns likely reflect higher home prices and rising mortgage rates which have harmed affordability and the stricter lending regulations that went into effect in January.
The general state of the economy remains among seller concerns but has dropped in intensity since the last survey. The percentage of sellers choosing that option fell to 26 percent from 39 percent in the fourth quarter when Redfin says some sellers were worried about the U.S. government shutdown and the debt ceiling fight. Sellers also worry about whether an appraisal will reflect the ultimate selling price.
More sellers who responded to Redfin's first quarter 2014 survey view this as a good time to buy a home than did so in the fourth quarter of 2013 with positive responses rising from 34 percent to 38 percent. Only 22 percent had viewed the outlook as a good one for selling in the first quarter of 2013.
Sellers are also looking beyond the sale of their existing homes and worrying about whether they will be able to buy their next one. The question about trouble financing cuts in both directions as sellers worry about being unable to get a mortgage or about rising rates impacting the affordability of their new home. Eleven percent said interest rates were a key factor in their decision to sell and another 41 percent said rates were "somewhat of a factor". Another seller concern is whether low inventories in many areas will mean aggressive competition for desirable properties.
The new question added to the current survey asked why sellers were planning to move. Forty-four percent said they hoped to move to a nicer or larger home than the one they were selling, 29 percent wanted to move to a different location.