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Yeah, that's possible, but my point is that tax assessment values are in no way an indication of current property value. They are based on last sale price plus however the assessing body adjusts year over year. On the other hand, your bank calculates immediate equity based on mortgage amount vs appraised price and adjust based on your amortization schedule. That's why the two numbers are independent.
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Jul 28, 2011 21:25
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jackyl posted:Yeah, that's possible, but my point is that tax assessment values are in no way an indication of current property value. They are a based on last sale price plus however the assessing body adjustsnyear over year. I may have been mentally replacing assessment with appraised... I assumed that was a report from his Appraiser. I absolutely agree that a tax assessment holds ZERO weight in these matters... What would likely happen if the appraisal came back, the seller would refuse to sell at that price and relist.
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Jul 28, 2011 21:28
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TraderStav posted:I may have been mentally replacing assessment with appraised... I assumed that was a report from his Appraiser. My friend from college, who is an excellent Realter, says that Tax Assessment plays an important psychological factor for a buyer in a down market: Agents and Buyers tend to shun houses listed for more than their Tax Assessment.
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Jul 28, 2011 21:37
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daslog posted:My friend from college, who is an excellent Realter, says that Tax Assessment plays an important psychological factor for a buyer in a down market: Agents and Buyers tend to shun houses listed for more than their Tax Assessment. That's interesting, when I was shopping, the only thing I cared about that number for was my tax obligation. I operate under the assumption that they know gently caress-all in relation to true market value.
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Jul 28, 2011 21:44
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TraderStav posted:That's interesting, when I was shopping, the only thing I cared about that number for was my tax obligation. I operate under the assumption that they know gently caress-all in relation to true market value. Think of it as an easy way to filter out Listings that are overpriced in a down market. When looking at a block of listings in a given price range, it's easy to toss out the one where the asking price is 180k and the tax assessment is 120k.
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Jul 28, 2011 21:47
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TraderStav posted:That's interesting, when I was shopping, the only thing I cared about that number for was my tax obligation. I operate under the assumption that they know gently caress-all in relation to true market value. I was the same way on my purchases, but didn't even apply it to tax obligation, since it resets based on last transaction price in every market I looked in. I agree with it acting as a psychological barrier to a lot of buyers, but that is a mistake on their part because of the reset. They will be heavily focused on boom homes with leSs negotiating room for one. Second, a far better initial metric is price /square foot compared to the immediate area. Then you factor in things like lot, condition, etc etc. Edit: I did the focus backwards at first.
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Jul 28, 2011 21:57
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TraderStav posted:That's not entirely true. The bank does its independent appraisal to make sure that the property you are purchasing it worth at least what you are paying for it. If you take a loan out for $240k on something worth $335k, they have a nice collateralized position on your mortgage note. If you default, they will take the difference. This is the equity portion they would have. Talked to the realtor, it's listed for $240K because its a short sale, which explains the ridiculously low sale price.
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Jul 29, 2011 12:42
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How much, generally, do repairs and upgrades add to the value of a home? Repairs being things like new ACs, new plumbing, walls, flooring, landscaping, fencing, etc. I bought my quad for around $190,000 and had a $40,000 loan on top of that in order to make repairs, but all told I probably spent closer to $70,000 on repairs including cash out of my pocket. In order to get rid of my PMI, I assume I need to pay my loan down to 80% of the $190,000($152,000) rather than the $230,000 total? If I were to reappraise, I seriously doubt that my upgrades would add $100k+ in value to the building, but it would be nice to know where I stand. I'm not losing a ton of money or anything, even at 75% occupancy I am at a mostly positive cash flow, but I have had big maintenance costs come up. I had to replace 4 ACs this year so I don't anticipate having to do that for many more years, but I am sure other things will come up.
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Jul 29, 2011 13:30
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IratelyBlank posted:How much, generally, do repairs and upgrades add to the value of a home? Repairs being things like new ACs, new plumbing, walls, flooring, landscaping, fencing, etc. I bought my quad for around $190,000 and had a $40,000 loan on top of that in order to make repairs, but all told I probably spent closer to $70,000 on repairs including cash out of my pocket. I don't think there is a fixed ratio. You can completely repair a shack on the ocean in Maine and it's not going to do anything to the value of your shack. It was worth a million before, and it's still worth a million because of it's location.
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Jul 29, 2011 13:51
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Douchebag posted:Talked to the realtor, it's listed for $240K because its a short sale, which explains the ridiculously low sale price. Short sales do not mean fire sales. The bank will want to get market value for the house, but are allowing less than loan value.
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Jul 29, 2011 13:58
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IratelyBlank posted:How much, generally, do repairs and upgrades add to the value of a home? Repairs being things like new ACs, new plumbing, walls, flooring, landscaping, fencing, etc. I bought my quad for around $190,000 and had a $40,000 loan on top of that in order to make repairs, but all told I probably spent closer to $70,000 on repairs including cash out of my pocket. Repairs and upgrades do little to the value of the home. A good rule of thumb is that for every 50k in repairs/upgrades on a property, the home may see 5-10k of appreciation, tops. There are the occasional people who fix up a old beaten down home and end up profiting in the end, but those examples are few and far between. The people who sink hundreds of thousands of dollars into renovating their home (adding additional floors, granite countertops, etc.) rarely get back more than 10% of what they put in.
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Jul 29, 2011 14:13
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TraderStav posted:Short sales do not mean fire sales. The bank will want to get market value for the house, but are allowing less than loan value. Sold in 2003 for $270K, was listed in May of 2010 for $279K, and has slowly been reduced to $240K. I love the tax history for this place (and NJ in general): 2009 $6,187 5.9% $335,600 121% 2008 $5,845 -1.1% $152,100 Buyers market yes, but its impossible to sell .
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Jul 29, 2011 14:20
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Shipon posted:Repairs and upgrades do little to the value of the home. A good rule of thumb is that for every 50k in repairs/upgrades on a property, the home may see 5-10k of appreciation, tops. There are the occasional people who fix up a old beaten down home and end up profiting in the end, but those examples are few and far between. The people who sink hundreds of thousands of dollars into renovating their home (adding additional floors, granite countertops, etc.) rarely get back more than 10% of what they put in. The three things that primarily affect price, are the three things you have no control over: Location Layout Square Footage
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Jul 29, 2011 14:47
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Douchebag posted:Sold in 2003 for $270K, was listed in May of 2010 for $279K, and has slowly been reduced to $240K.
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Jul 29, 2011 15:44
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Shipon posted:Repairs and upgrades do little to the value of the home. A good rule of thumb is that for every 50k in repairs/upgrades on a property, the home may see 5-10k of appreciation, tops. There are the occasional people who fix up a old beaten down home and end up profiting in the end, but those examples are few and far between. The people who sink hundreds of thousands of dollars into renovating their home (adding additional floors, granite countertops, etc.) rarely get back more than 10% of what they put in. Or at least, if given a choice between a $290k home with a 15 year old, decreipt, cheap builder grade kitchen and baths, and a $300k home with a brand new kitchen and 2 brand new baths, all reasonably decent, it would not take me long to make the call for the $300k place.
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Jul 29, 2011 15:51
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gvibes posted:This doesn't really seem right, though I guess it depends a lot on market. My place has a 15 year old kitchen and baths, and I think that, if I dropped $50k on completely re-doing the kitchen and both bathrooms, I would see a lot more increase in value than $5k-$10k. Improvements help people want to buy your house, not how much they'll pay. They'll either walk in and say, I like it, what's it cost? Or this is shite, show me the next. I have never looked at the improvements and calculated the amount I'm willing to pay based on that. Or said, well... it does have marble tops, I guess that's worth overpaying $10k. Look at $/sq ft, it's a much more reliable measure. Then bump that up against whether or not you actually like the place.
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Jul 29, 2011 16:02
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Shipon posted:Repairs and upgrades do little to the value of the home. A good rule of thumb is that for every 50k in repairs/upgrades on a property, the home may see 5-10k of appreciation, tops. There are the occasional people who fix up a old beaten down home and end up profiting in the end, but those examples are few and far between. The people who sink hundreds of thousands of dollars into renovating their home (adding additional floors, granite countertops, etc.) rarely get back more than 10% of what they put in. Repairs will come close to 100% ROI because if you don't repair stuff you would have to discount the price of the house equally to compensate. In fact they can exceed 100% ROI, because in most markets buyers will pay a premium for properties that don't need any work over those that do. The catch is that repairs only counteract depreciation. They don't add new value. So if the purchase price of $190K was for a run down 4-plex, then the repairs added value - but only enough to bring it up to what it would have sold for in good shape. If the $190K purchase price represents the price of the property in good condition and the repairs were to fix stuff that broke since purchase, then that was money spent to bring the house back up to $190K condition and added no new value. ROI on upgrades varies tremendously. Things like paint and decor that are a matter of personal taste will return little to nothing, Things like bathrooms and kitchens can return most of the cost provided you don't overshoot the price and luxury point your layout, size and location will support. Other poo poo falls somewhere in between.
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Jul 29, 2011 18:12
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So I checked with someone who said his company would approve for up to 50% of gross income on a loan i.e. if my monthly gross was 8k then they would approve up to 4k a month for mortgage, insurance and taxes. Does this seem right? He also said it would be an FHA loan which I am pretty sure don't allow more than 28% or something... Do places ever try to make cash from you from appraisal fees then just back out of the loan after?
Demonachizer fucked around with this message at 22:22 on Jul 30, 2011 |
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Jul 30, 2011 22:19
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FHA loans can go a lot higher than 28%, how high your bank will approve you for can depend on a number of factors including the bank's credit overlays (when they choose to be stricter than FHA's requirements), your credit score, what response you receive from the FHA Total Scorecard (an automated underwriting system, it renders a decision based on your credit report, assets, income, and other factors), etc. If you have a strong loan scenario it's certainly possible that you'd be approved at 50%. One thing to keep in mind is that the bank will be looking at 2 ratios, the front and back ends. The front end is your housing expense, which is the combination of principal, interest, taxes, insurance, and mortgage insurance and HOA fees (where applicable) - basically your total house payment divided by your total qualified income. The back end ratio is your total debt, so on top of your housing payment that will include the liabilities on your credit report, alimony and child support if you pay them, and other stuff of that nature. When he's telling you he can get you an approval at 50% he's talking about your back end ratio so you're not looking at a $4k/month mortgage but $4k for everything. Depending on circumstances/loan program the front end ratio may not matter at all. For conventional loans Fannie and Freddie really only care about total ratio in their automated underwriting systems analysis. In regards to backing out of the loan after collecting fees, with all the recent regulatory changes I can't imagine anyone being stupid enough to try that. Plus, you're probably paying the appraiser or an appraisal management company to have the appraisal done, not the broker directly. I don't think many places charge extravagant upfront fees these days, for most shops they don't get paid unless the loan funds.
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Jul 31, 2011 04:17
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demonachizer posted:Do places ever try to make cash from you from appraisal fees then just back out of the loan after? Banks make loans. Buyers pay for appraisals, and they pay it to independent appraisers. The bank makes nothing at all from you paying for an appraisal. Banks have a vested interest in offering you the biggest loan you can afford... and not one penny more, because if you can't afford it, you'll go busto. In theory. In practice, many, many banks only originate loans, which they immediately sell. For example, the company that wrote the loan on my mortgage sold it to Wells Fargo the very next month. In theory, the above limit still applies, because in theory if they wrote a loan for more than the buyer could afford, it'd be a toxic asset that no other entity would want to buy; those potential buyers, of course, doing their due diligence in discovering the borrower's financial viability in exactly the same way the loan originator did. You may perhaps have heard a thing or two in the news during the past couple of years, about these toxic assets and how they got sold anyway. But nowadays, that market has (supposedly) dried up, and so we're (supposedly) back to responsible banks only writing loans their customers can just barely afford. All of this is, of course irrelevant; as a buyer, you should get a loan you can easily afford. Just because a bank says they'll approve you for, say, $350k, doesn't mean you can't limit yourself to $200k, on the basis that that's the most you want to spend. A smart buyer evaluates his own budget and pays not a penny more than what he's comfortable with, the bank's offers be damned.
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Jul 31, 2011 04:26
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Wow I am in a lot better shape than I thought then. I have an upcoming revenue stream increase that is guaranteed and so a current 50% total DTI ratio will work super well. I am lucky in that my outstanding debt is currently 1500 dollars and am paying that off next month. Thanks for the heads up it really helped me feel less nervous. I was worried because everywhere online talks about the 28% number for FHA loans as if it is a hard limit. EDIT: This is through a place called Guaranteed Rate Mortgage Inc. and I read a lot of bad reviews online. Also this is what he said in the email: In regards to our fees, our standard lender fee is $1,145 and the appraisal is $300. I price all of my loans out at a minimum, so I usually have some room to cut those fees down for you, so once you have found a property and we are looking to lock in I will let you know at that time what those will be. It seems like he is implying the appraisal would be paid to them? I will walk I guess if they ask me to pay them for the appraisal since it seems like I would absolutely want an independent appraisal. Still seems kosher? Sorry for all the questions. I am going to keep shopping around but these guys seem really cheap. He mentioned 4.25% and no points I believe. Demonachizer fucked around with this message at 05:09 on Jul 31, 2011 |
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Jul 31, 2011 04:57
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demonachizer posted:Thanks for the heads up it really helped me feel less nervous. I was worried because everywhere online talks about the 28% number for FHA loans as if it is a hard limit. The 28% figure you often see is more in relation to this: Leperflesh posted:All of this is, of course irrelevant; as a buyer, you should get a loan you can easily afford. Just because a bank says they'll approve you for, say, $350k, doesn't mean you can't limit yourself to $200k, on the basis that that's the most you want to spend. A smart buyer evaluates his own budget and pays not a penny more than what he's comfortable with, the bank's offers be damned. This, this, a thousand times this. Your bank being able to approve a particular payment doesn't mean you should take it to the max. The ratio your lender calculates doesn't encompass all of your debts - they're going off the minimum payments on your credit report. Your cable/internet/cell phone/food/etc that you spend hundreds on every month is going to show up as a $25/month minimum payment on your credit card, and that's what the bank will qualify you with. In reality you're obviously spending a lot more than $25 every month. Plus, your ratios are calculated using gross income and not net - after state/federal taxes, 401k contributions, etc a fair amount of the income you're qualified with you don't have access to. If you are interested in buying, do the math on what you actually spend a month and figure out what is a comfortable payment for you. From there you can work out how much house you can afford. Don't get pressured into buying more than you're comfortable with just because the bank can technically approve it. demonachizer posted:It seems like he is implying the appraisal would be paid to them? I will walk I guess if they ask me to pay them for the appraisal since it seems like I would absolutely want an independent appraisal. Depending on the lender the company is planning to sell the mortgage to they will probably have some sort of system in place for the ordering of the appraisal and to confirm the appraiser is acting independently. Often times the appraisal will be ordered through an appraisal management company which basically acts as a go between for the appraiser and the mortgage company to ensure nothing fishy is going on. I'm not super familiar with FHA guidelines in this regard, but paying the mortgage company directly for the appraisal is unusual in my experience. He might just be telling you the cost as an FYI type thing for what to expect cost wise, thanks to RESPA guidelines he's liable to pay you restitution if he under discloses fees on your Good Faith Estimate.
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Jul 31, 2011 05:45
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Captain Windex posted:The 28% figure you often see is more in relation to this: Oh I know not to overstretch. I actually am paying close to 50% of my gross on rent currently as it is. This isn't including my wife's revenue as she has a chapter 13 less than 2 years from discharge. It was literally not her fault I can't go into details but there was fraud involved and really really really bad advice from an attorney. This occurred before I knew her but it still is here. Thanks again guys for all the good info/advice.
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Jul 31, 2011 06:48
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The appraisal is for the bank, not you. It's so they know the value of the home they are trying to collatoralize the loan against. The only reason you need to care what the appraisal says is so that the bank will qualify you for the purchase price. The inspection needs to be independent and selected by you. Paying the mortgage company for an appraisal is not a conflict of interest or something to be concerned about. Come to think about it, I don't believe any banks will let you choose your appraiser as they may be your buddy inflating the value of the property!
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Jul 31, 2011 14:27
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So I'm to the point in my life where I'm looking to purchase a house. I'm a first-time buyer which in the state of South Dakota has a program where you can get up to 200kish at 4.375%. I'm not looking to spend that much but anyways, to the real question: I'm interested in the foreclosed houses here as a majority of them are unfinished in some way - no appliances, no deck, unfinished basement etc. The thing I find baffling is the bank lists them equal to houses around them which are finished. For example: there is a 2 bedroom 1 bath ranch on the market currently with no patio, no appliances and a framed-in unfinished basement listed equal to a 4 bedroom finished home built the same year. Am I insane to think I could go to the bank and ask for upwards of 30% less than what they're asking considering how unfinished it is and the costs required? I.E this home is listed at $139,900 is it plausible to ask $100,00? I am very handy, can do the finishing myself and getting to choose my own appliances is very appealing personally. I could swing the finishing on a whim as the purchase would cut my monthly housing costs significantly and living in a partially-unfinished home doesn't really bother me. So is this something that is actually feasible with REO foreclosure or is this just a pipe dream? They also listed the house with no patio but one of the features is a patio  Edit: woops I is really close to O 
flyboi fucked around with this message at 01:03 on Aug 1, 2011 |
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Aug 1, 2011 00:26
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Crossposting from my thread: As some of you know, my grandfather is old and a couple of years ago was moved to an assisted living facility. I sold his car and my mom was going to sell the house. Well, it wasn't taken care of at all and was in a large state of disrepair. It was once appraised at 150kish. It's in a nice neighborhood and could be a nice house so I don't doubt that. Well, after a couple of years on the market, the price was lowered and lowered and it finally sold last week for $92k (they had it listed for $105k). My mom says after the seller's fees and realtor fees and such it was more like $72k. (Note that I'm basing these only by what my mother told me). Well, then the prospective owner brought an inspector in, it turns out that the house hadn't been fully fixed (as I had thought). Raccoons living int he attic had destroyed the insulation (the door to the attic had been nailed shut and nobody checked in there to make sure everything was OK) and the crawlspace was full of water and mold (they didn't even know there was a crawlspace under the house... there is no basement). Supposedly there was something like $30k worth of repairs that needed to be done so the guy is backing out (and for good reason). My mother has had enough and told me tonight she wants to just walk away from it. Note that the house is completely paid off. How bad of an idea would it be to take full control of the house with the idea of listing it for a very low price (as a fixer-upper), maybe $40k, stating all of the problems with the house. If I get everybody to agree that if I sell it I get all of the profit from selling it, I could stand to make a whole ton of money, just because other people don't want to deal with it anymore. See, my mother is still hung up on the fact that it was once worth so much more. She doesn't understand that a house is only worth what somebody will pay for it, and with the current condition of the house and current housing market it's just not going to be worth what she thinks it's worth and is just so frustrated she doesn't want anything to do with it. She has to split the profit three ways anyway (with her brother and sister) but they don't want anything to do with the house either. My aunt lives a state away and doesn't want anything to do with it, and my uncle recently lost his girlfriend of 17 years and just purchased a cheap house and is going to live as a hermit (with the large life insurance policy that paid out). Thoughts? I'm primarily worried about thinks like insurance and property tax, but I also know that there are loans out there for home repair (though I probably wouldn't deal with them, I would just list it as-is so I could get away with paying as little in taxes and such that I could). I could stand to profit enormously from this. Maybe. My mother seemed open to the idea, since she's just sick of dealing with it, but I don't know what all is involved. Oddly enough I can't find the house on Zillow and I know it was on there before because I was lookig through the pictures. Weird.
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Aug 1, 2011 01:40
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Douchebag posted:My fear is that in 3 years the market will have improved to where we will never be able to afford homes in NJ any longer... This is old, but I want to reiterate that acting out of fear is absolutely the worst thing you can ever do in regards to a house. Housing bubbles are fueled by fear like this. Don't fall for it. Buy and sell on your terms and your terms alone.
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Aug 1, 2011 01:56
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To add to the above comment: over a year ago I looked at a house that was a fantastic buy ($180K) for my area. My current home was slightly under water, and I would have had to liquidate most of my savings to move. I decided to wait, knowing that it would either be there later or another house would be come around. Now I'm married and we've saved over $20K in the past year. We've also paid off more of our current home and the value has risen slightly (according to Zillow and comps in the area), and that same home I wanted is still for sale at $160K. Patience is a virtue. If I had rushed out to buy that home I would've shot myself in the foot to the tune of $30K. Nocheez fucked around with this message at 13:46 on Aug 1, 2011 |
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Aug 1, 2011 02:38
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loving realtors... Here's a story for you My wife and I like our realtors, plural because they are a husband/wife team. We have known them personally for a couple of years. They have been working hard for us to find a place in the DC area in our price range. They normally sell higher-end places than what we are looking for- but have treated us like anyone else. They have agreed to pay their broker's commission fee for us (a few hundred bucks I think,) as well as spring for their realty company's one-year home warranty program for us. We found a place in one of the better neighborhoods around here that would normally be out of our price range. It needs a little TLC but the house has good bones and is 3 blocks from one of the best elementary schools in Northern VA. It appears to not have any serious problems. The owners of this place have had it on the market for well over 200 days (which is an eternity in this zip code) and have been unable to attract serious buyers. They are on their second listing agency and apparently their current agent is desperate to attract some attention. (There is a huge "BRING ALL OFFERS" sign in front of this place, which you don't see in this neighborhood.) Also, they have the place listed for what is too much to begin with. We looked at the place, but after seeing that that asking price was well out of our price range we wrote it off as unattainable. However over the course of the next week, the listing agent contacted our agent multiple times, and basically begged for an offer. Our agent told her what our price range was, and that if we made an offer it was unlikely to be very close to the asking price. She said that it was okay because the owners really needed to sell and did not want to have to rent the place out. Our agents thought that it might be a good opportunity to get into that neighborhood and could be worth a shot. So, we wrote an offer 15% under asking price with a $5,000 seller subsidy, which is towards the high end of our range. (Closing costs are usually around $10-11,000 here) The next day the sellers counter-offered $2,000 below asking price with NO seller subsidy.  The day after that they took the place off the market. That's a pretty big "gently caress YOU" IMO. What I'm guessing happened (and our agents tend to agree) is that the seller's agent was just desperate to move this thing and was talking us up to the sellers as if we were willing to come in close to the asking price (even though she was told repeatedly that that was not going to happen.) We knew this was probably a long shot but still.... I'm new at house buying but is this a common thing? I guess the sellers are going to try to rent this place out (they are apparently not local, and the place is vacant.) It's not like we wanted to offend the sellers (which apparently happened) but their agent begged for an offer knowing what our price range was. So... The situation in the DC market is: the prices are depressed yes- and further outside the beltway stuff is sitting at well below 2008 values for quite awhile. However near and inside the beltway in the good school districts, the places with lots of updates are moving pretty quickly, and the prices are not AS depressed. However places like this house with 15 year old appliances, no updates, ungrounded wall outlets, old wood paneling etc. are sitting. Which tells me it's still a buyer's market. Dijkstra fucked around with this message at 14:09 on Aug 1, 2011 |
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Aug 1, 2011 13:48
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CornHolio posted:Crossposting from my thread: Stuff This buyer only inspected the house only after it was sold and still somehow backed out?
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Aug 1, 2011 15:00
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Bovine Delight posted:This buyer only inspected the house only after it was sold and still somehow backed out? No, I don't think it was officially sold yet, they had just agreed on a price is all. He is expected to run like hell away from it today (and with good reason).
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Aug 1, 2011 15:07
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Dijkstra posted:loving realtors... Here's a story for you They're the typical home sellers in this market; people who are deluded and still believe they can go for inflated prices and refuse to believe anyone who tells them otherwise. Let them rot, find someone else who is willing to play ball.
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Aug 1, 2011 15:10
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Dijkstra posted:I'm new at house buying but is this a common thing? As far as Realtors go, leading buyers into thinking they can buy the home at a lower than the listed value is dangerous. Seller's can request the their agent to make statements like 'they're motivated' or 'willing to negotiate', but quoting a price or alluding to a price other than the full listed value is illegal in some states and can be interpreted as misrepresenting the home.
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Aug 1, 2011 15:27
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Shipon posted:They're the typical home sellers in this market; people who are deluded and still believe they can go for inflated prices and refuse to believe anyone who tells them otherwise. Let them rot, find someone else who is willing to play ball. It's kind of ridiculous how long people cling to their outrageous asking prices here. It's like they looked at a Zillow history graph, picked the highest value from 3 years ago (nevermind the subsequent 25% drop) and made that the asking price. There's one place we've been looking at for a few months and my agent thinks they are currently asking about $80,000 too high. They have been dropping the price $5,000 every 30 days. Amazing. Like someone said earlier, your stupid house is worth what someone is willing to pay for it. Not what it appraised at 4 years ago. Guacala posted:As far as Realtors go, leading buyers into thinking they can buy the home at a lower than the listed value is dangerous. Yeah, it seemed strange to me that the agent would act in bad faith like that. I guess it was more a case of "Motivated Agent" than "Motivated Seller." I asked my agent briefly about this and she seemed to allude to that fact that this was very strange and unprofessional and kind of left it at that. After all she was told that our offer would be seriously entertained, even it it was down in our price range. In any case, the house is off the market now so I guess the sellers were unhappy with her too. I'll probably talk to my agent about avoiding this agent's listings in the future.
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Aug 1, 2011 15:55
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Dijkstra posted:I asked my agent briefly about this and she seemed to allude to that fact that this was very strange and unprofessional and kind of left it at that. After all she was told that our offer would be seriously entertained, even it it was down in our price range. That type of conduct is intolerable in any agency. Being a decent human being and adhering to ethical conduct is more valuable than a sale. It's sad that one agent is tarnishing a handful potential homes for willing buyers.
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Aug 1, 2011 16:07
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What's the best way to find a realtor? The one we used to buy our condo is no longer in the business. I've asked all our friends who bought in the last 5 years and none would recommend their agent, except for one that's a 45 minute drive away. Is there a site that has reviews of agents?
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Aug 1, 2011 16:43
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Shipon posted:Repairs and upgrades do little to the value of the home. A good rule of thumb is that for every 50k in repairs/upgrades on a property, the home may see 5-10k of appreciation, tops. There are the occasional people who fix up a old beaten down home and end up profiting in the end, but those examples are few and far between. The people who sink hundreds of thousands of dollars into renovating their home (adding additional floors, granite countertops, etc.) rarely get back more than 10% of what they put in. Did you pull these number out of your rear end or where did you get them from? I once worked on a business plan for a company that would perform small repairs/upgrades on houses about to be sold to maximize the visual appeal of the home. I did a lot of research and found a lot of data that ROI depended on the room but as I recall the lowest average ROI was around 50% but some rooms were as high as 85%.
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Aug 1, 2011 17:30
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alreadybeen posted:Did you pull these number out of your rear end or where did you get them from? To be fair, those ROIs are probably based on the most economical upgrades possible for the biggest visual buck. Cheap upgrades that are flashy can be deceiving. Putting in quality upgrades that a homeowner would actually want would definitely reduce your ROI on them.
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Aug 1, 2011 17:33
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Basically there are two types of renovations (IMO): polishing and refurbishing. Refurbishing is what most people think of when they think of renovating. Pull out the existing room down to the studs, build it into their  dream room with all the upgraded finishes and 'touches' they can think of.Polishing is what house flippers and stagers do. This means look at the entire house, and fix the worst things for the least amount of money. Refurbishing doesn't tend to pay off in increased selling price, especially since building your dream <room> tends to improve it beyond the neighborhood's standard. Polishing will pay off, because it's designed to do maximum bang for the buck. Fresh paint and carpets, some plantings, maybe a new front door, maybe replace the oldest kitchen appliance with something new and shiny. This stuff works. If you're renovating because you love the house and want to stay in it, go hog wild and refurbish to your heart's content. If you're renovating because you're going to move and you want to increase the value, you need to think polish. Save the Brazilian granite for your dream home, because the more you love something that's unique, the more likely prospective buyers are going to dislike it. The <$10000 of polishing I did when I moved in to my house (new paint over the smoke stains, replaced popcorn ceilings, replaced closet doors and door hardware, bathroom refresh) raised my house value by about $15000 (appraised at both ends). If I'd ripped out the kitchen and redone it floor to ceiling, I could have spent over $30k and not gotten nearly the same result.
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Aug 1, 2011 17:59
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flyboi posted:Am I insane to think I could go to the bank and ask for upwards of 30% less than what they're asking considering how unfinished it is and the costs required? I.E this home is listed at $139,900 is it plausible to ask $100,00? As a buyer, you can make any offer you drat well please. You are not under any obligation, ever, to be "nice" to the seller by meeting their unrealistic expectations. That includes both ordinary sales, and REOs. It seems odd to me that the foreclosed properties you're seeing are being listed too high, but whatever. You can offer exactly what you you're willing to pay. If they say no, what have you lost? Just some time, and some effort by your realtor in writing the offer (but really, they use a standard form and fill in the blanks, it's not much of their time). That said... beware the fixer-upper! Bewaaaaaare! Unless you can float both the mortgage payment and rent, you will want a house that is ready for you to move in to. And then you'll be fixing-upping it while living in it, which can be absolute hell depending on what needs to be done. And, it always costs more than you though it was going to, and takes longer. I don't want to tell you not to do it, mind; just, be very realistic with your plans. Remember that there's loads of houses, and more go on sale every day, so you can relax and take your pick and if you make an offer and they make a counter-offer that's too high, walk away, don't fall in love with the place or start thinking you should buy it because you already spent a little time and money doing inspections or whatever. Far better to walk away from $400 or so spent on inspections, than spend thousands and thousands more on a property than you wanted to.
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Aug 1, 2011 19:14
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