Friday, May 18, 2018

FHA buyers losing out to cash on West Side

By Tara Hark and Max Wagner
Bengal News West Reporters
A new family searches Buffalo for a perfect home to start their lives in, finding one sitting on the corner of Grant Street and Lafayette Avenue. They go to the bank and to their excitement, they’re approved for a Federal Housing Administration loan and are right on their way to a brand-new house and life on the West Side.
But sitting on the lawn is a big red sold sign, signaling that the house was purchased before that family even got the chance to step foot on the sidewalk. The buyer gave a cash offer, trumping the FHA buyer and leaving them once again searching for their home. 
Realtor Naomi Lasco
This situation has been problematic for FHA buyers all over the West Side.
“Cash will just come in, put a lower offer in, maybe asking price, take it as is, and call it a day,” said Naomi Lasco, a West Side real estate agent for Keller Williams Realty and West Side resident. “In a situation where there are several offers on a house; FHA offers are always at the bottom. Cash most always wins, because it’s quick, up front, and involves much less work for the seller. There’s no appraisal, no inspection, just some paperwork.”
Lasco, on the impact of cash real-estate deals:
This problem is rampant on the West Side for an FHA buyer because the homes are generally older and in need of renovations. Sellers are choosing cash buyers because they don’t want to pay for all the repairs required, real estate agents say.
“The reason why FHA or conventional loans are not as desirable to sellers is because they have a reputation for nitpicking houses and requiring them to do certain repairs in order for the buyer to get approved for the loan to buy the property,” said Lee Tringali, Metro Real Estate agent and investor on the West Side.
Besides FHA buyers being shut out of the market, cash buyers can be problematic for renters on the West Side.
Lasco explains a history of cash buyers neglecting their obligations to the tenants of their properties and squeezing as much value out of the home without putting in work.
“A lot of the time cash buyers are not occupiers, they are investors. So, then we run into sometimes having people who do not maintain the property, and just keep it as is or it deteriorates,” said Lasco.
The issue of neglectful landlords in Buffalo was so expansive that the city implemented the Rental Registration Program in 2005 to specifically identify problem properties, absentee landlords, and the quality of life for Buffalo tenants.
“We have many, many out of town landlords, and it is a problem. Some are even out of the country,” said Sam Fanara, director of rental registration for the City of Buffalo.
Lasco mentioned her own neighbors on Congress Street, who are Somalian, Burmese, and from Sudan, who all rent from an absentee landlord. The tenants were bringing out cupboards filled with water due to poor plumbing and roofing issues.
“Renters need to know their rights, and be able to voice them, which is difficult when there is a language barrier,” said Lasco.
Both City Hall and realtors explained that although the issue exists, it has improved in recent years.
The West Side property value has increased exponentially in the past few years, reducing the negligence of out of town owners, Tringali said
“A lot of the buyers are people who want to live there, and they take care of their property as such. People in New York, the younger generation love the West Side, and are willing to pay for it,”  Tringali said.