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I can't possibly spend the time to keep up with this style of debate, quoting every line of my post and responding to it. Let me instead summarize by saying: no, an appraiser should not care or take into account the factors that might be "artificially" pushing a price upwards or downwards. Whether those factors are reasonable or unreasonable, the value of the house is what it will sell for, period. End of story. If everyone is getting ridicu-loans and being unreasonable and prices are wildly out of whack compared to rents, so what? That's bad, but the value is what it is. It is not the responsibility of appraisers to try to second-guess the market. The banks should not rely on an appraisal to assess whether the buyers can afford their loan. They do their own due diligence (or fail to do it) based on the buyer's particular circumstances. Diamonds are a perfect example for exactly the reason you said they aren't. Cartels (DeBeers) hold back inventory and advertise to "artificially" inflate diamond prices to ridiculous levels. So what? If I can sell my diamond for $5k thanks to DeBeers, then it's worth $5k. The intrinsic value as an industrial material may be just a few cents, but we are not discussing intrinsic value: we are discussing market value. I certainly would not want some appraiser telling me my diamond is only worth $3k, even though I could sell it for $5k, because blah blah DeBeers it's so unfair. I think you are hanging way too much significance on a home loan property appraisal. They're just a tool for the bank to help them decide whether or not to extend a secured loan to someone. As for market trends: unemployment is actually pretty much flat the last few months, certainly not trending up the way it did for most of 2008 and 2009; foreclosures are also trending flat, not up; and I haven't seen any recent wage reports but I believe they're flat too. I am speaking in terms of the last quarter, not the last week. Consumer confidence is up, and the economy is now growing rapidly. I'm not saying everything is roses, but I do disagree with the certainty that some people seem to have that 2010 will be a year of continued decline, rather than the first year of hesitant recovery.
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Jan 30, 2010 06:00
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I feel like I should wait longer to buy a house. I'm convinced that housing values have a lot of room to go down, even though the bubble didn't hit my area that hard either way. Other than that, If I wanted to buy now, where do I even find the numbers to justify a low bid? I can search through the county's website to see what the house sold for since 1976, but I don't have enough info for my county to determine when and how the bubble hit (percentage wise). Any help? Then again, should I even bother? I'm thinking that I'm just gonna piss people off with low bids.
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Feb 1, 2010 16:40
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You can go to zillow to find out what other houses in the neighborhood have recently sold for. They also have graphs for zip codes/states/etc so you can figure out what the highest point was from there. You might piss people off with low bids (we did on a couple of occasions) but so what? If there's one that accepts, you get a deal. Waiting for a while longer isn't a terrible idea, and if you don't feel ready to buy right now I'd hold off until you are completely comfortable.
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Feb 1, 2010 17:02
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El Mariachi posted:Other than that, If I wanted to buy now, where do I even find the numbers to justify a low bid? Why do you have to justify a low bid to anyone but yourself? Your realtor could probably give some insight by looking at recent comparable sales, or if you are doing it yourself look for recent sales on Zillow or Trulia. If you are doing it yourself the only thing you have to lose is a few minutes faxing off a bid. If your realtor is doing it they might say "That bid is too unreasonable" and try and save himself some work putting together the bid for you. Mine never cared, it will sometimes get you a counteroffer back that is still acceptable to you. If they don't counteroffer then you just move on because they want way more than what you bid. There is no one to piss off except homeowners you will never see again or a bank manager you will never meet.
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Feb 1, 2010 17:08
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What do most people consider the cutoff point between 'reasonable' and 'lowball offer' anyway?
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Feb 1, 2010 19:17
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Mister Fister posted:What do most people consider the cutoff point between 'reasonable' and 'lowball offer' anyway? You mean, most sellers? It depends entirely on whether they're desperate, and whether they're asking a price they think of as "high but reasonable" or "super-low to attract interest". Also, how attractive your offer is depends a lot on what the other offers, if any, look like. Be the only one making an offer and some desperate sellers will take it regardless, because they're in a tight spot and can't wait just to hope for a better deal. On the other hand, a seller who is asking exactly what they owe on their depreciated house can't afford to take a dollar less than asking, and might reject all offers that come in lower at all. Or even decide they'd rather not sell if they can't get their asking price. ...and then there are bank-owned properties, which is a whole nother ball game. So, there's no straight answer to that question unfortunately.
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Feb 1, 2010 21:18
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OK I apologize for not replying earlier, been working 12hr shifts lately so my routine for the past 3 days has been sleep/shower/work/sleep non-stop, so no time to screw with my internets.Leperflesh posted:I can't possibly spend the time to keep up with this style of debate, quoting every line of my post and responding to it. Leperflesh posted:Let me instead summarize by saying: no, an appraiser should not care or take into account the factors that might be "artificially" pushing a price upwards or downwards. Leperflesh posted:Whether those factors are reasonable or unreasonable, the value of the house is what it will sell for, period. End of story. Leperflesh posted:If everyone is getting ridicu-loans and being unreasonable and prices are wildly out of whack compared to rents, so what?....Cartels (DeBeers) hold back inventory and advertise to "artificially" inflate diamond prices to ridiculous levels. So what?.... I certainly would not want some appraiser telling me my diamond is only worth $3k, even though I could sell it for $5k, because blah blah DeBeers it's so unfair.  gently caress you, gonna get mine" even if you have to gently caress over some Greater Fools to do it.Leperflesh posted:The banks should not rely on an appraisal to assess whether the buyers can afford their loan. They do their own due diligence (or fail to do it) based on the buyer's particular circumstances. Leperflesh posted:They're just a tool for the bank to help them decide whether or not to extend a secured loan to someone. Leperflesh posted:unemployment is actually pretty much flat the last few months Leperflesh posted:foreclosures are also trending flat, not up; quote:Foreclosure filings increased 14% in December from November, the first monthly increase since foreclosure activity peaked in July, according to a RealtyTrac report out Thursday. Leperflesh posted:and I haven't seen any recent wage reports but I believe they're flat too. I am speaking in terms of the last quarter, not the last week.  Leperflesh posted:Consumer confidence is up Leperflesh posted:and the economy is now growing rapidly. OK.\/\/\/\/\/\/ PC LOAD LETTER fucked around with this message at 23:04 on Feb 1, 2010 |
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Feb 1, 2010 22:16
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PC LOAD LETTER posted:Is this just hope or do you actually have some stuff that you can point to as positive for the real economy? Thank you for taking the time to dig up some graphs and things to help clarify understanding. Line by line arguments are terrible and nobody else bothers to read them so I'd suggest not doing that in the future so that your argument can be heard by the whole thread and not just the poster you're responding to.
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Feb 1, 2010 22:48
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No don't worry I won't be taking it to another thread. I'm sorry for even responding to PC LOAD LETTER and I won't be doing that again.
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Feb 1, 2010 23:12
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moana posted:If there's one that accepts, you get a deal. This just happened to my wife and I. We bid 15 under asking, they responded halfway, and we took it. It's an older couple who we think wants to get out and move to Florida/downsize, and the house is entirely paid off for them, so whatever they get is pure profit. All told, the price we're getting, down payment, paying points, location and general condition of the house, this is a fantastic deal. Closing is March 5th, and we'll have a month to paint/clean/replace light fixtures/work on electrical before we have to be out of our apartment.
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Feb 3, 2010 18:34
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The last page had some references to using "gifts" For down payments.. Really, the only time this comes into play is when the bank is going over your finances and notices something funny.. In our case, my father lent us the 8000 stimulus money, and knowing I was building a home, we slowly transferred it into my accounts up to closing, and then when the Gov. check came in the following month, I repaid him.. As long as they don't see a sudden growth of 20k unexplainable dollars, it shouldn't be a problem. We did a conventional mortgage in case you are wondering. Also, the whole gift thing is just a way for the banks to gain confidence in its customers. Someone who can't even afford a down payment or took the time to save one up might be a risky customer, hence why they look down on gifts. At least in our case, they never questioned where our finances were coming from, so it may not be an issue.. I transferred in chunks just to be safe though. Oh, on a side note.. I think the worst part about owning a house is scheduling things.. Anytime you need a contractor, or an inspector from the township to come, you better be taking a day off of work because they only come during business hours.. So frustrating. FidgetyRat fucked around with this message at 19:54 on Feb 3, 2010 |
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Feb 3, 2010 19:46
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With FHA loans, the money you receive can be a gift but it can't be a loan. In my case I had to get a signed statement that some money I got from my mom was a gift, and they needed a deposit slip and a copy of the check and a copy of her bank statement (to show she hadn't borrowed the money herself)!
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Feb 3, 2010 20:14
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My parents gave me $5000 toward a down payment, primarily as padding money so that I wouldn't be entirely broke after buying a house. My bank just gave me a form to have them sign stating that he money was a gift and not a loan.
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Feb 3, 2010 20:50
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FidgetyRat posted:Oh, on a side note.. I think the worst part about owning a house is scheduling things.. Anytime you need a contractor, or an inspector from the township to come, you better be taking a day off of work because they only come during business hours.. So frustrating. So. True. I hate this. And I work for a fairly understanding company where I can do some work from home. But it's such a pain. I can't even imagine how it would work when we want to redo our kitchen, because it's not like I could work from home for two weeks. Do we just find someone we trust and give him the keys?
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Feb 3, 2010 22:19
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FidgetyRat posted:Oh, on a side note.. I think the worst part about owning a house is scheduling things.. Anytime you need a contractor, or an inspector from the township to come, you better be taking a day off of work because they only come during business hours.. So frustrating. I love my job for this reason. I work 5 days, get 2 off, then 5 on, then 3 off, and then back to the beginning. The 3 days off makes the whole schedule rotate, so there are weeks where I have Tuesday-Thursday off, making poo poo like that or doctors appointments a lot easier to deal with.
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Feb 4, 2010 02:17
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Question about refinancing: Does anybody know of any banks that will allow refinancing of a home WITHOUT a 6 month or longer seasoning period? I ask because I am using family financing to buy my home (I should be closing within hours!). I won't need a cash-out loan as the family member in question will certainly be my lien holder on paper and I will be paying him monthly mortgage payments. My credit union requires a 6 month seasoning period before I refinance. This was fine, as my uncle was willing to give me 5 years to refinance if I wanted to wait. With the fed ceasing their purchases of mortgage-backed securities next month, I was hoping maybe I could manage to refinance before then.
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Feb 5, 2010 15:25
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Are there any websites that give forecasts for the housing markets of different regions? I'm trying to figure out how long I can wait before prices start to really go up in San Francsico.
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Feb 5, 2010 19:23
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jerkstore77 posted:Are there any websites that give forecasts for the housing markets of different regions? I'm trying to figure out how long I can wait before prices start to really go up in San Francsico. Edit: I apologize in advance for not actually answering your question. Probably there are, but I would give them less credence than a tabloid headline. Especially here in the Bay Area. I looked for stuff like that a lot, when I started my house-hunt last year (we started shopping in June and bought in December). All the really good advice I've seen, about housing and more generally about markets, has said that you (as the 'little guy') should not try to time the market. That when individual investors try to time the markets they lose far more often than they win. Buy when you can afford it and can find a house you want to live in. If that means waiting (and maybe prices start to rise), so be it; you'll have a house you like (and prices will be rising, yay!). If that means buying tomorrow and maybe prices go down for another 6 months, well, maybe you could have gotten a 'better deal' but you wouldn't have this house (that you like, right?) and you're going to live in it for 5+ years anyway (right?) and houses are terrible investments anyway, so it's not like you were trying to get rich with this (right?) and you bought something you could afford anyway (right?). All that said, out of curiosity, what is the price range you're looking at? My personal feeling (which you should not rely on, any more than you'd rely on anyone else's personal feeling) is that houses at the high end of the market in SF (say, $800k+) are still losing value, houses at the middle end (Say, $600-800) are likely to remain right in that bracket, and houses at the bottom end (say, $400k-600k) are very unlikely to lose any more value. This because of the huge pent-up demand at the low end here in the bay area; there are so, so many people who could afford a $400k house on their incomes, but have been priced out of the market for 10+ years. Whereas the people who can actually afford $800k houses have had plenty of opportunity to buy all along, and did so, and are currently under the water in a bad way and are in no position to buy.
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Feb 5, 2010 21:31
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Leperflesh posted:
Thanks for responding. I actually already own a condo in the bay area but am looking to upgrade to something within SF itself sometime soon. I'm not sure whether that means I'll want to sell my existing place or rent it out. I used one of those calculators online and it says that the high end of what I can afford is about $300,000. I know I would have a roommate to help with the mortgage, but I know I dont want to rely on that. I could also definitely afford to put at least 20% down for something at that price, but ideally, I'd like to save for a bit longer because I don't want to live in the Tenderloin or Hunter's Point. I'm just scared that prices will spike back up in the near term. Also, I just read https://www.patrick.net and now I'm all depressed about all this. 
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Feb 5, 2010 21:49
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You could certainly buy a condo/townhome in SF for that, but I would not count on ever being able to get a decent house in San Fran for $300k. Bayview/Hunter's Point has been slowly gentrifying, but I personally would not live there either so I can hardly blame you. As for that link... yuck. I don't like the way he builds his arguments and I especially disapprove of his use of the word "prove" when he should say "indicate". E.g., a blowhard posted:Salaries and rents prove that prices will keep falling for a long time. No, no they don't. quote:The only true sign of a bottom is a price low enough so that you could rent out the house and make a profit. No, the only true 'sign' of a bottom is when people start paying more for houses than they were, and that trend continues for an extended period. In other words, hindsight. There is no future indicator that you can hang on to as 'proof' that a bottom is about to arrive, or is not about to arrive, because prices are based on multiple semi-dependend factors, including 'consumer confidence' which is itself a soft-factor that cannot be reliably predicted. More importantly, though, rents respond to multiple factors including (especially) demand and scarcity. In a market with a shortage of rental space, rents rise. Not everyone who owns and/or wants to sell a house can just rent it instead, even if that's a potentially better financial decision. Some areas (including San Francisco) have rent control that can hold rents down and/or prevent rents from rising as fast as they 'should', according to other market forces. And of course the scarcity/rentability thing varies depending on the market segment, local employment segment, availability of medium-distance public transportation, employment centers, localized cost of living, and so on and so on. Read this kind of blog but do not make decisions based on it. Leperflesh fucked around with this message at 22:34 on Feb 5, 2010 |
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Feb 5, 2010 22:28
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Leperflesh posted:As for that link... yuck. I don't like the way he builds his arguments and I especially disapprove of his use of the word "prove" when he should say "indicate". E.g., http://www.doctorhousingbubble.com is a very good blog regarding these kinds of things. This guy has been predicting a crash since 2006 and really knows his stuff. Rent IS a good tool to analyze the housing market along with a multitude of other data. I'd suggest reading this blog if you want more insight into the market other than anecdotal data about a few houses in the bay area. edit: perfect example in this article http://www.doctorhousingbubble.com/...-mortgage-data/ SplitDestiny fucked around with this message at 07:08 on Feb 6, 2010 |
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Feb 6, 2010 06:59
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I would appreciate some advice here. We made an offer on a home and on Sunday we will have hit day eight of our ten day option period (contract executed on Jan 31st, but no one told us until Feb 1st, so I'm assuming Tuesday is the final day), and we've run into some issues with the inspection. The inspector noticed that one of the trees appeared to have rubbed multiple asphalt shingles off of the roof. The tree has since been cut back, but he advised that we have a roofer come out for an estimate, since the slope was too steep for him to view / validate anything on the second level. The roofer came out on Friday, and told us that: Roofer posted:**The roof is showing excessive signs of granular loss, hail may have hit home at one time, however, it is difficult to see due to the condition of We informed the listing agent, and he informed the sellers. I was shocked by their answer. They told our agent that they had already consulted with their insurance company, and that the insurance company claimed that it just needed repair. This would be fine and dandy with me, if not for the fact that the home has been on the market since September 15th, and from what our agent was telling us, they claim to have contacted their insurance company about this issue around that same time (not sure that this even matters, to be honest, and I'll get to that in a moment). The seller's disclosure paints a very different picture, however. The disclosure states that they were not aware of any issues with their roof, despite the shingles on the ground in their backyard, and an apparent loss that is viewable from the ground level. The seller has agreed to contact their insurance company again regarding this matter, however, I don't expect much more traction than before. I'm trying to determine my best course of action. I've contacted my potential homeowner's insurance company, Amica, and they have filed my request / quote with the underwriters. When I spoke with the Amica rep I, foolishly, I'm assuming, disclosed that I was concerned about the insurability of the roof, after the roofer's assessment. They mentioned that since the home is 15 years old, there is a good chance that the underwriters would be hitting me with some form of stipulation that I replace the roof within a prescribed amount of time, and that any suffered loss of the roof prior to said replacement would only yield me the actual cost value of the roof regardless of whether or not I disclosed my concerns to them. I'm waiting for a call from Amica, and I'll be asking how quickly I can have one of their inspectors out, but I highly doubt that it will be before my Tuesday deadline. It feels like I may still have some wiggle room here, because the seller has yet to furnish me a copy of the HOA covenant, and the Texas contract has this to say about the matter: TREC posted:"Subdivision Information" means: (i) the restrictions applying to the subdivision, (ii) the bylaws and rules of the Property Owner's Association (Association), and (iii) a resale certificate, all of which comply with Section 207.003 of the Texas Property Code. I'm assuming that this means that I'll still be able to terminate the contract for any reason within 7 days of receiving the HOA bylaws (which I haven't). My goal is to have the seller pay for a new roof, if at all possible, or drop the sale price enough to account for the price of a new roof, which was quoted at $4500. The CMA my agent did had the home valued around $124,000, and I'm purchasing it for $124,000 with the seller paying $5,000 in closing. I know for a fact that the seller is under a time crunch here, because they have a new home that has already completed construction, and they are under contract to close on that home. I believe that this seller is desperate, because they had the home listed at $120,000 which is $4,000 below the CMA, after dropping it from 135,900 -> 129,000 -> 125,000. Does anyone happen to have any useful advice regarding this kind of situation? If the article that I quoted above allows me to terminate over the HOA bylaws, then this should buy me the time I need to get the FHA appraisal done, and more roofer or insurance quotes. I'm not even sure that this 15 year old roof would pass the FHA appraisal, because I read that their guidelines require that the roof be serviceable for two years after closing, and I know that this roof has seem some terrible hail storms. If the seller is as desperate as I think they are, then every day buys me more leverage over them. I really don't like strong-arming them, but I also am offended that they lied on the disclosure, and were apparently naive enough to believe that a roofing issue wouldn't cause problems with funding, insurability, and closing. Christ, even if it just needed the repairs, why the gently caress wouldn't they do them anyway? It's frustrating because I love the home and the area, and I'd like to be as gracious a buyer as possible, but this just feels like a slap in the face. It also seems like an excellent reason why every seller should follow Have Some Flowers' posts about pre-inspections. All of this unavoidable bullshit could have been avoided. Edit. I suppose that it would be helpful to mention that we are currently renting an apartment with a lease that expires on March 18th, and we are required to give 30 days notice. Our purchase agreement has 02/26/2010 listed as the closing date. Any advice would be appreciated. ok_dirdel fucked around with this message at 11:21 on Feb 7, 2010 |
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Feb 7, 2010 11:15
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jerkstore77 posted:Also, I just read https://www.patrick.net and now I'm all depressed about all this. Is there any reason why you wouldn't want to know that sort of thing? Or were just hoping to buy now now now for whatever reason and the info. he gives is puncturing your dreams? Is it really that horrible to wait a few more years and save 10's of thousands, or possibly hundreds of thousands more if you were hoping to buy? If you don't want to take that guys' (or my) word for it (and want to ignore SplitDestiny's link too while you're at it) then google around, all the info. he is giving is considered to be basic knowledge when buying (or selling) homes. The only thing I would add to it is that I think the bubble went on so long that rents got skewed upwards and that the long term trend for jobs/wages is negative, so we'll probably see an overshoot to the downside for home prices. That will likely take years though due to market forces and government intervention. If that sounds crazy then consider that in many places prices have declined to where they were in 2003-4, and yet are still dropping, but it took almost 4-5 years (most places peaked around 2005-2006) to get to that point. Then go read up a bit about what happened during other booms/busts like the one in the early 90's and in the early 80's. You'll learn a lot. AppleCider: Looks like you're in a tough spot, and AFAICS it could play out in any number of ways, which may leave you screwed or better off. I would really ask a realtor/lawyer to see if you're correct about the local laws first, they'll probably know more than anyone here, and what they say could really make all the difference. What you're saying sounds correct to me, but IANAL. It smells fishy to me, since it wasn't in the disclosure and you're saying there is damage that is clearly viewable from the ground with shingles or pieces of shingles on the ground. How in the hell could they have missed that? If you're really really are set on that home I'd try to get them to lower the price of the house at least double the amount of what you were quoted for repairs. When I say double I mean double BTW. That isn't some sort of negotiating tactic that you let them talk you down a bit so that their ego's are stroked. There is a good chance that the damage is worse than it looks, maybe much worse, and there are always some extra little surprises to be found after you move in that really start to nickle ($50) and dime ($100) you to death. Personally I'd walk away if I could and try renting for another few months or move elsewhere. Somebody tries that crap, it is a clear signal to me that they are not dealing honestly and are trying to screw me over, and homes are freaking expensive. Even a cheap one is expensive. Maybe I'm a weirdo but I have no problem putting up with the hassle and renting elsewhere even if it means spending a grand or so to move + deposit on a new rent. Compared to the cost of a home, or a new roof, that is cheap. Hopefully you're not stuck, because if you are the sellers' probably already know and know that you likely won't walk away from it, since you won't have any way to negotiate with them other than bluffing or yelling. Neither of which have worked well IME. Good luck either which way.
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Feb 7, 2010 18:55
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A 15-year old roof with significant damage and evidence of poor maintenance probably needs replacement now or soon. Why not just counteroffer for the seller to replace the roof or provide additional $4500 at closing? They accepted an offer for $124k but didn't disclose the roof condition which they are surely aware of at some level - they should be expecting this. If you buy it as is, sounds like you're going to replace the roof in the next year or three due to insurance demands or water leaks anyway. I wouldn't rely on some unrelated HOA covenant technicalities to get you out of a roof problem, and I wouldn't go with the $119k/no repairs option unless you're willing to pay for the new roof yourself soon after you move in. $4500 sounds cheap for a roof by the way. If the market value is really $124k and it needs a new roof for $5k, they should eventually find someone who will pay them $119k without requiring roof repairs. But maybe they can't afford to wait any longer.
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Feb 7, 2010 19:06
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Thank you both for your responses. The reason I asked about the HOA "technicality" is that it seems that their contract over their newly constructed home would be running out soon, and the longer I can hold out, the more desperate they are and the less chance they have of successfully putting the house back on the market to close within their time frame. Does anyone have experience with new home construction,and the time frames involved? How long would they have to close on it once it's constructed? I'm assuming that they are nearing the end of that road because of their drop to $4,000 below valuation. I won't let them feed me any bullshit about the drop accounting for the roof repairs, because that was never listed in their disclosure, or their contract. I have until February 18th to make my decision (30 days notice), so if it's true that I can use the HOA techniciality to terminate "for any reason," this buys me more time, and eats into their window of opportunity. I definitely agree that they need to either adjust the price to account for the repairs, or repair it themselves. Is there a chance that this won't even pass FHA appraisal? If that's the case, would they would have to pay out of pocket for a roof replacement, or would we still be able to negotiate price that into our contract? I'm assuming that the former is correct. Also, can someone speak to the stringency of FHA vs. Conventional inspectors? I know that they have had a higher bid than mine (it came minutes after they signed my contract), and I'm wondering if they would weigh the risks of letting me walk vs. trying to pass it on a Conventional loan inspection instead. I'll obviously be in contact with my agent today to address my concerns, but I'd still appreciate any additional feedback. On an unrelated note, has anyone had experience with thermal imaging inspections? It seems like it could really answer a lot of unknowns about the house, however, I'm not sure how much of it is just hype. ok_dirdel fucked around with this message at 20:25 on Feb 7, 2010 |
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Feb 7, 2010 20:11
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I believe you said you were still in your inspection contingency period. The inspection contingency is exactly that: your offer is contingent upon the inspection, meaning, you can walk away (without losing your earnest money deposit) for any reason in the inspection. Undisclosed roof damage certainly qualifies. All you need to do is either A) walk away, citing the roof as the reason, or B) refuse to release your contingency until you are satisfied, either that it is repaired immediately or that the sellers lower the price enough to cover your estimated cost of repair/replacement. The 10-day (or whatever) contingency period is something you and the sellers agree to. If you ask for an extension of the contingency, they then have a choice of either granting it, or terminating the contract (and again, you get all your money back, although you are out the cost of your own inspectors, which sucks but there's nothing to be done about that). In my case, we had to get no fewer than three extensions on our inspection contingency, because the gas heater had been disconnected and PG&E would not reconnect it unless the owner-of-record asked; and they (the bank) delayed and then had to hire a repair person to get it working and apparently Fannie Mae (the owner) only has one heater guy they work with in the whole Bay Area. Anyway, the secondary thing is that the sellers sign a legal document saying they've disclosed everything they are aware of. Clearly they lied, which makes them vulnerable to litigation if you so chose. IANAL, talk to one if you feel you need to go that way. The most important thing is do not release your inspection contingency until you are satisfied. This means being prepared to walk away from the house, losing the cost of your inspections, but it's much better to lose a few hundred bucks now than it is to get trapped in a contract where the only options are to buy at the agreed-upon price, or lose your entire earnest-money deposit. Edit: Oh yeah, FHA. FHA rules are that you have to buy a house that is safe to live in. They have various condition requirements. For example, the house must have a working sink and a working cooking appliance, it can't have exposed wiring, it can't have obvious structural issues. A roof with a big hole in it is probably an issue. That said, our agent (who has done numerous FHA sales) said that inspectors themselves are all over the map. He's had one that failed the inspection because of a missing plate over a wall socket, but he's also had one that, in his words, "couldn't have spent more than 30 seconds at the house" and ignored a number of things he thought would be problems. So, at least around here, much depends on how seriously the particular FHA inspector decides to take things. If a house fails FHA of course that isn't an immediate showstopper; you just have to take action to mitigate the issues and then get it re-inspected. E.g., buy a cheapo stove or install a kitchen sink if the kitchen has been gutted (we saw a few foreclosures like that), or whatever. For the roof, that'd probably mean getting the roof fixed before closing on the house (which you should not pay for out of pocket, because then what if the deal falls through? You're out thousands of dollars!) So that underlines to me that personally I'd consider walking, or requiring the roof to be actually fixed before closing, even if that takes weeks. Really the sellers' agent should have told them that would be necessary, months ago. Leperflesh fucked around with this message at 21:45 on Feb 7, 2010 |
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Feb 7, 2010 21:40
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Well, we'll see tomorrow. The sellers are having their insurance company out to assess the roof, and determine if the damage is weather-related. I'm not really expecting much from the insurance company, and it will all depend on how the seller decides to take it from there. They have agreed to extend the contingency period, if needed, and I was wrong, it starts the day AFTER they execute the contract, so I really have until 11:59:59 on Wednesday to make a decision if we don't extend. I'd absolutely love to know how much time they have left to make this sale before they suffer repercussions from the builder. I can't imagine that the builder will put up with the property taxes and other assorted costs related to holding a house, but I'm really not sure how that works. I've made it quite clear to our agent that this is a sticking point for us, and that we are totally willing to walk from this house we love if the terms aren't right. Our agent agrees that this is an insurability / appraisal issue, so we do have that going for us. She also mentioned that whenever you have someone under contract as a seller, you do whatever the hell you can to make the deal work, because there are no guarantees that you'll even come this far with another offer, especially when you are pressed for time.
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Feb 8, 2010 08:04
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Seems like you're on the right track. For context: I've seen/heard of people refusing to release contingency for issues far less important. My friend's dad sold their house a couple years ago, and the buyers held things up for a couple of months over several very minor things. They had to replace a few floorboards near the back door that were too worn, pull a climbing plant down off of the chimney bricks and have the chimney treated or something, re-weatherstrip a window... it got pretty silly near the end. But my friend's parents really needed the buyer and so they just gritted their teeth and did each thing. A gaping hole in the roof is as clear cut as it gets.
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Feb 8, 2010 19:05
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What are the best resources for downpayment assistance? My wife and I had saved nearly $10,000 only to have that savings reduced to less than $1,000 due to medical bills and terrible insurance last year. We are tired of renting and want to buy here in the East Bay, CA. I think Livermore may be our best option at this point and am looking for homes in the $300,000 range. We make "too much" money, with a combined income of around $120,000 - which I think exempts us from certain downpayment assistance program(s). The last time I took a rudimentary look at this was over a year ago, however. Any advice on that front?
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Feb 8, 2010 19:26
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First, the useful answer: Besides actual gifts, you're going to have trouble getting money from any source that you are going to have to pay back, because down payment money is money you are supposed to have in pocket. Second, not to be rude, but if you and your wife make $120,000 a year and only have $1000 saved, I don't know if buying a house is such a good idea. I hope that $1000 is your specific down payment money, on top of a 3-6 month emergency fund? I mean, my wife and I were looking at houses in a similar range and didn't even start looking until we had $50k saved for a downpayment, and we make less than $120k/yr.
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Feb 8, 2010 19:33
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Caustic posted:What are the best resources for downpayment assistance? My wife and I had saved nearly $10,000 only to have that savings reduced to less than $1,000 due to medical bills and terrible insurance last year. We are tired of renting and want to buy here in the East Bay, CA. I think Livermore may be our best option at this point and am looking for homes in the $300,000 range. I know you don't want to hear it, but really you're in no position to buy a house, especially in CA. If either of you are teachers or other lower income state employees there are a few programs out there, but it sounds like you aren't. Your best bet is to contact a realtor or mortgage broker that specializes in first time buyers to see if there are any programs out there for you. You can also check http://www.calhfa.ca.gov/ for programs, but I'm pretty sure you make way too much money. Honestly you guys make 120K a year, it shouldn't be hard to save up 3.5% for a FHA loan
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Feb 8, 2010 19:52
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Thanks for the advice. While we make $120,000 a year, our rent is $2000 a month and we have two kids in daycare/preschool, which is very expensive in the Bay Area (what isn't I guess). Like I said, we saved last year, but it was wiped out by medical bills. I'll check out the resources linked above, thanks.
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Feb 8, 2010 19:57
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If you buy a $300,000 house, your monthly housing expense will still be (at least) $2000 a month. It sounds like buying a house will leave you in just as tight a financial situation as you are in now, but with the added difficulty of a mortgage. I suggest either looking for something a bit cheaper (you definitely can in the East Bay - I just bought a 3br in Concord for $240k) or do something to make more room in your budget so you can save more effectively, and also have more room in your budget after you buy your house to cover the additional expenses of home ownership. On a $240k house, my monthly cost - including principal + interest, FHA insurance (instead of PMI), and taxes, comes to just under $1700 a month. My PG&E bills have gone up from our old rental, and there are lots of maintenance and upkeep costs I now have to bear myself. Additionally I have to make a long drive once a week that I didn't used to, adding about another $100 a month is gas and bridge tolls. My advice is to reduce your costs, save more money, and then look for a house that costs substantially less per month than your too-tight rental situation right now.
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Feb 8, 2010 20:02
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Caustic posted:Any advice on that front? Beyond the fact that you are in no position at all to be buying a $300,000 piece of property when you have $1K in the bank, yes. While not necessarily down payment assistance, NACA has been covered a little bit in this thread and might be of use to you. They will be able to get you a loan with $0 down/no closing costs but won't let you do it if you have $0 in the bank. In Atlanta purchasing a $120K home they required me to have $4K in the bank, I wouldn't be surprised if it was $10K for you. They will require more if they determine your house payment (+insurance/taxes) will be increasing your monthly costs. I think its 6 months of whatever the difference is. You need to have a few thousand liquid just to put down in earnest money with a bid plus money for inspectors, escrows, and such. $10K would be a starting point for me using NACA in CA, and nowhere close to what I would be trying to save if I was doing an FHA loan. Purchase limit also looks like $323K (No income limit). $323K at their generous 4.625% is $1660/mo before taxes and insurance so you will surely be paying more than that $2K per month you are paying now. Obligatory southeasterner  at California housing market. My wife and I clear $70K/yr and would probably feel house poor trying to go above the $120K mortgage we have now and all we have is a few hundred bucks a month in student loans.
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Feb 8, 2010 21:10
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Got my refund! About three months to the day. I was also pleasantly surprised to have gotten $250 in interest over those three months. Almost makes me wish they had kept it longer.
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Feb 9, 2010 01:32
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They gave you 3 and an eighth percent interest over three months? That's an annualized (simple) interest of 12.5%. Seems ridiculously large to me... I'm amazed.
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Feb 9, 2010 02:48
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Caustic posted:Thanks for the advice. While we make $120,000 a year, our rent is $2000 a month and we have two kids in daycare/preschool, which is very expensive in the Bay Area (what isn't I guess). Like I said, we saved last year, but it was wiped out by medical bills. How in the world do you make $120,000 a year and only have $1000 in savings? That is just embarrassing. You said you have two kids so presumably you're at least in your mid twenties maybe around 30? How could you not have saved more by now? Sorry but you are in no shape to buy a house. Initial cash outlay includes upfront costs include taxes, inspections, closing costs, and down payment. Plus you need to show the bank you have cash on hand for 6-9 months worth of mortgage after all of that in case something happens.
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Feb 9, 2010 04:54
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Strict 9 posted:Got my refund! About three months to the day. The interest clock would have been started in April (I think?), so really 10 months. I got $100ish in interest, but I got the check in October. Still, I feel a little gypped there, hmm. Anyway it seems they are using ~3% annual rate?
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Feb 9, 2010 05:30
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BeastOfExmoor posted:Not perfect to say the least. The seller on the house we're in contract with went down the form 17 and checked no to almost every question, including some that obviously should've been yes (Has the water supply provided potable water over the last year, do you know when the house was built, etc.). Our appraisal came back the other day (appraised for the exact listing price, to the dollar. Hmmm..) and everywhere that mentioned how much we were paying, etc. he had put a number $100,000 higher than it should've been. I know nobody was on pins and needles, but the sellers were apparently quite motivated to get everything taken care of and managed to get the stubborn city to allow them to do the cheap option and cap at the street. The work couldn't get scheduled until next week so closing got pushed back a few days, but we still have two weekends to transition from the place we're renting now, so no worries there. I can't believe in two weeks I'll be sitting in my own home.
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Feb 9, 2010 06:28
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alreadybeen posted:How in the world do you make $120,000 a year and only have $1000 in savings? That is just embarrassing. Did you miss the part of my earlier post where I said that my savings had been wiped out by medical bills? Leperflesh: Yes, it's amazing how low-priced Concord and Pleasant Hill housing has become, I'm definitely considering the cheaper route in those areas - perhaps when I renew a significant downpayment savings. Caustic fucked around with this message at 18:14 on Feb 9, 2010 |
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Feb 9, 2010 18:11
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