10/24/2014

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Shutdown forces some to second guess buying a home

Shutdown forces some to second guess buying a home
(File photo)
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SEATTLE - Chalk it up to nerves, uncertainty and the fact the federal government isn't working - and Ellen Haberle, an economist with Redfin, says it's no surprise people are skeptical about purchasing property.

"There is a lot of confusion right now and a lot of people not receiving paychecks all of a sudden," Haberle says.

Since Oct. 1, the first day of the government shutdown, Redfin has been monitoring the real-estate market both nationally and locally, looking to see how the shutdown is affecting the industry. Haberle says they've been polling their agents in the Seattle area and what they're finding is similar across the board - people are starting to pull the plug on their home-buying plans.

"One couple, both federal government employees, put an offer on a home before the shutdown, and now they feel uncomfortable moving forward so they have rescinded that offer," Haberle says.

She notes another buyer in Lake Stevens also decided to back out of a purchasing agreement after learning the offices of the U.S. Department of Agriculture, the agency which backed the buyer's rural development loan, were forced to close as a result of the government shutdown.

But despite what's happening at the federal level, Haberle says home buyers have options, and agents are finding ways to work with buyers.

"One buyer in the Bothell area had put an offer on a home that was accepted before the shutdown," she says. "Once the shutdown happened he became panic stricken."

Haberle says in his case the agent worked with the buyer to add an addendum to his purchasing contract, protecting him from any unforeseen consequences related to the shutdown. And it's not just agents, she says lenders, especially those offering conventional loans, are finding ways around possible paperwork and closing delays.

"On a case-by-case basis lenders are making alternative arrangements to prevent a backlog from happening," Haberle says. "Instead of requiring buyers to show tax transcripts that can only come from the IRS, some lenders are temporarily accepting copies of tax returns from the previous year, having that bridge the gap until the shutdown ends."

Haberle recommends potential buyers, and those who have already submitted an offer check with their agents and lenders first and see what options they may have before pulling out altogether.

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