My model is working as I described. When there is no money, motivated sellers drop price to make the deal. See the 5% loss in one go below.
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The Chicago Tribune reports from Illinois. “The residential real estate industry is bracing for more complications and the potential for collapsed sales agreements because of global credit crunch fears. Last week, North Side broker Beth Ryan said a seller she represents accepted $25,000 less for his $500,000 house after another offer fell through when the would-be buyer was shut out of a mortgage.”
“‘Their credit score was 580 and, as of last Tuesday, their broker said they could have gotten a loan approved for 3 percent down,’ Ryan said. ‘But then standards tightened and he said no one would touch that deal.’”
“‘If you have [a preapproval] from last week, you can rip that up’ because conditions are changing daily, said mortgage broker Kit Mueller.” ….
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