We can close conforming (Fannie/Freddie) loans in 12 CALENDAR days – easily – IF we get a “Property Inspection Waiver,” aka PIW aka Appraisal Waiver.
Savvy agents know this – so they often ask us to run “DU” (Fannie Mae’s automated underwriter) with the property address before they make an offer.
If DU gives us a PIW, agents know that (1) they do not need an appraisal contingency; and (2) they can offer a 12-calendar-day close.
As a reminder though, Fannie and Freddie do not issue PIWs unless: (1) the borrower is relatively strong; (2) the address is in Fannie’s or Freddie’s database (because an appraisal was done previously for a Fannie/Freddie loan); and (3) the price/value is less than $1,000,000.
#3 is a very important reminder for our CA buyers in particular, as you can’t buy a shoe box for less than $2 million in some Bay Area towns.
The biggest takeaway for this blog though is to always ask us to run DU to see if we can get a PIW before you make offers (with conforming financing).
Because if we do get a PIW, you will have some very powerful ammunition to help you win in a bidding war.
No Bubble Here
I stole this shamelessly from Leonard Steinberg’s Compass Blog, as it is another great reminder of how much better positioned borrowers are financially now than they were in 2008.
* As of the 4th quarter of 2021, only 3.8% of U.S. disposable personal income was going towards mortgage debt payments. At the height of the 2000s housing bubble, that figure was nearly double at 7.2%. The shady lending practices of the aughts were regulated out of the market by the 2010 Dodd-Frank Act. If a storm does come, most homeowners, in theory, should be better positioned to ride it out.
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