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Spamtron7000 posted:For my part, I appreciate the feedback. I sometimes overlook the fact that the banks have recourse inasmuch as they own the house when loans are defaulted. However, I do strongly feel that many American borrowers are smart enough to recognize how the laws that protect them can be abused to either default or sell short out of perfectly good and fair loans and that it's a problem. All the market risk is now passed on to the bank. Sometimes it's a fine line to draw between righteousness and fraud. Many Americans just don't care about that fine line - they're selfish and feel entitled to poo poo all over the same bank who lent them the money to help fulfill the dream of home ownership. That's what I don't like about the system. I understand the sentiment here, but the practicalities of the situation can make it more cost-effective for the banks to eat the difference. Getting a judgment or reinstating debtor's prison costs a lot, often more than the banks would get back out - so it would only be punitive or a scare tactic to keep people on the borderline in line, and a net cost to society at large. As scare tactics go, the fact that you have a credit report that follows you around is a sufficient deterrent for a lot of people. There aren't many folks who would just default if they had the means to comfortably pay their debts - the downside on creditworthiness isn't worth it. Banks tightening lending standards means there are less people on the knife-edge who have to make that choice. They have to find the sweet spot where they can offer a profitable competitive product.
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Jan 23, 2013 21:55
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Final remarks: http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/untouchables/fraud-was-the-f-bomb/
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Jan 23, 2013 21:57
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Spamtron7000 posted:I admit to being a little high and mighty about all this because after my first marriage ended I got stuck with over $70k in credit card debt that quickly ballooned to over a 30% APR plus a few other debt surprises left to me by my beloved ex-wife. I could have gone a different route and chosen any number of debt relief options but I manned up and paid my debt - in all it cost me over $150k. I had to close my retirement account (substantial penalty) and live like a pauper for 4 years to pay it off but I did it. In hindsight it would have been better for me financially and better for my credit if I'd given up and let the vultures pick at scraps but I paid it off myself. I'm proud of that because I know I can take care of myself and I don't need the government or anyone else to bail me out or protect me from myself. I think you can see and are actually acknowledging that you have a personal, emotional stake in your argument, and I appreciate that you're willing to spell it out. But are you sure you're not rationalizing, a little? If you accept the premise that the debtor does not have a moral or ethical responsibility to pay off the lender, then you would have to also accept the premise that you paid $150k when you didn't need to and had no moral or ethical responsibility to do so. Which is not to say that you're wrong; arguments about what is ethical or moral are very difficult to resolve because they invariably descend from either some religious doctrine, or are derived from personal convictions (or most commonly, some combination of the two). But perhaps it does mean that you're specifically disinclined towards sympathy for people who take the other road. And I'm also sorry. I think that on the one hand, there should be consequences to our decisions. But on the other hand, the consequences should be proportionate. Your decision to take on joint responsibility for your wife's debt was, at worst, a misjudgement of her character. I don't think anyone should have to pay $150k as a penalty for misjudging their spouse's character. So from my perspective, the ruined credit you'd have suffered from a bankruptcy would probably have been sufficient consequence to deter you from taking those debts lightly, but you'd have been completely justified - legally and ethically - to declare bankruptcy and discharge your debts that way. This isn't the exact same thing as someone who undertakes a mortgage and then, perhaps due to their speculation not working out, decides they want out. But it's got some strong similarities. The decision to take out a large mortgage or not does not reduce to simply "being smart" or whatever. Plenty of extremely smart people make poor decisions - everyone makes a poor decision from time to time - and I think it's bad for our society in general, and wrong in many particular cases, for an individual to suffer severe privation for years and years as a result. Essentially what I'm arguing is that blanket condemnation of one side or the other is hyperbolic and unfair and ultimately harmful. There should be proportionality to risk, there should be a way to hedge or insure against it for both parties in a contract, and there should be a respectful recognition that everyone's circumstances are different and sometimes people face tough decisions that we can forgive, if not completely excuse, if they go astray.
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Jan 23, 2013 22:01
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I'm late to the party, but my parting shot: You can't just gloss over the fact that it is considered unethical to most people to force others to pay for your responsibilities, whether you're acting legally or otherwise. "My house might lose value" is not an unforeseeable circumstance.
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Jan 24, 2013 01:13
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cstine posted:This is the most logical thing posted in this whole debate; you signed a civil contract stating you'd pay or they'd throw you out. If you stop paying, you can just wait until they exercise their option and throw you out. This was essentially her plan, sounds better the way you put it though. Spamtron7000 posted:Right. Because 51% of this country believes its citizens are lemmings - incapable of independent thought and reasoning and need to be protected from their bad decisions by their big brother. It's completely unreasonable for a poor citizen to actually have to read and understand how a loan works to accept funding for their $500,000 property. Banks are obviously the bad guys here because they lend money to people who otherwise would be unable to afford to buy homes. They are so evil they EVEN MAKE MONEY FROM IT! It is unreasonable if you consider the landscape prior to 2008 when even the "experts" (the people Americans were convinced to be experts) believed that housing prices would continue to skyrocket forever and home ownership was preached to everyone, especially to the least fortunate among us as a way to escape poverty. I really don't see how the ignorant poor could resist the temptation to enter the middle class especially when everyone (maybe even a lot of you) agreed that housing was an excellent investment. quote:I know what you're saying is accurate but it's a completely unAmerican idea. Seriously - what the gently caress is wrong with the world. Predatory lending is a term made up by people trying to further their socialist political agenda. "Don't worry about the banks or any of your other fiduciary responsibilities. Your government will protect you from your own incompetence." I really don't see how it's unAmerican, our country was far more protectionist and by today's standards socialistic throughout the majority of the 20th century, particularly during the industrial revolution.  Spamtron7000 posted:For my part, I appreciate the feedback. I sometimes overlook the fact that the banks have recourse inasmuch as they own the house when loans are defaulted. However, I do strongly feel that many American borrowers are smart enough to recognize how the laws that protect them can be abused to either default or sell short out of perfectly good and fair loans and that it's a problem. All the market risk is now passed on to the bank. Sometimes it's a fine line to draw between righteousness and fraud. Many Americans just don't care about that fine line - they're selfish and feel entitled to poo poo all over the same bank who lent them the money to help fulfill the dream of home ownership. That's what I don't like about the system. Yeah, I'm sorry but this isn't a good reason to be high and mighty about anything. I'm glad you got out of that debt but you can't say that everyone can do it just because you were able to. I managed to pay off all of my debts (except my mortgage, which isn't under-water) a couple of years ago but I can't assume everyone else with an equivalent amount of debt would be able to do the same. Not everyone is as financially educated as me, has a well paying job or has an army of goons willing to drop financial wisdom simply out of goodwill. Dik Hz posted:I'm late to the party, but my parting shot: Neither is asking the federal government for a bailout after their predatory lending schemes finally caught up to them. Sephiroth_IRA fucked around with this message at 06:13 on Jan 24, 2013 |
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Jan 24, 2013 01:21
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A lot of people seem to think unethical behavior is okay because noone should have personal responsibility for anything anymore, and we're in an era where people hate banks so they use that as justification that it's ok to attempt to defraud them. Whether or not banks are good people does not make it okay for people to try to steal property for as long as they can get away with. Not paying for something on purpose and continuing to use it is theft. Good job abusing the systems' safeguards that were put in to protect honest people (multiple notices, time periods, contact efforts, etc) to get free rent, but at least acknowledge you're a detriment to society.
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Jan 24, 2013 05:22
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kjh
Sephiroth_IRA fucked around with this message at 12:34 on Aug 1, 2015 |
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Jan 24, 2013 05:57
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Spamtron7000 posted:For my part, I appreciate the feedback. I sometimes overlook the fact that the banks have recourse inasmuch as they own the house when loans are defaulted. However, I do strongly feel that many American borrowers are smart enough to recognize how the laws that protect them can be abused to either default or sell short out of perfectly good and fair loans and that it's a problem. All the market risk is now passed on to the bank. Sometimes it's a fine line to draw between righteousness and fraud. Many Americans just don't care about that fine line - they're selfish and feel entitled to poo poo all over the same bank who lent them the money to help fulfill the dream of home ownership. That's what I don't like about the system. Banks aren't forced into short sales. Believe me, banks aren't the victims in that kind of situation. In general the bank bears very little risk in giving out mortgages, especially when real state prices are rising. This is what led to banks giving out such risky mortgages in the first place; when real estate prices rise particularly quickly, then repossessing homes and then reselling them can actually be quite profitable, so branch lenders were pushed by management to get out as many loans as possible no matter how lovely the person's credit was. Even if someone defaults, they can just sell the house to someone else for even more than the previous loan was worth. Obviously this scheme falls apart if home prices don't rise quickly enough or if home prices fall. Banks engaged in this kind of risky behavior because bank managers foolishly believed that real estate prices would continue rising at unsustainable rates. Banks understand the risks of lending. Let's not pretend that banks are helpless victims in a foreclosure or short sale situation.
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Jan 24, 2013 10:22
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So we had a freeze-thaw cycle and it caused our main sanitary clay pipe to get severed and collapse. Taking the day off work to baby sit a large plumbing job. Do never buy. As an aside about the whole banks thing - banks aren't people. Contracts were signed, models were generated, statistics were consulted, decisions were made. Mortgages are investments by banks and there is a certain amount of risk and reward. Having an emotional argument about blame and ethics is ridiculous when it's all simply a matter of business. Both sides can take all the legal recourses available and don't have to do anything that isn't stipulated in the contract or decided by a court of law after examining the contract. It's up to both parties to do due diligence to protect themselves through the contract.
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Jan 24, 2013 18:17
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Speaking of unethical behavior, I'm selling my home FSBO, and I'm astonished at how shady buyer's agents can be. I'm offering 2% commission, which works out to over $10,000. Yeah, that's lower than they'd like, but wake up and join the 21st century, Realtor scum. I've had so many agents hint or outright tell me that they won't tell their clients about my home unless I agree to pay 3%. Lesson to you home buyers: Don't ever trust your agent. Find the homes you want to view on Trulia, don't let an agent spoonfeed you the ones with high commissions. Then, find out what the offered commission is, and if it's on the low side and your agent tells you they can't reach the owner, they are lying. Call the owner yourself.
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Jan 24, 2013 18:34
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Your customers' agents work on commission, you are deliberately lowering their compensation by a third, and you expected them to what, thank you for the privilege? Feel free to rage against the system, and I agree the system sucks and badly needs to change, but you shouldn't be surprised that people don't want to work with you when you're slashing their salary. Especially if you're FSBO without a sellers' agent, so they can also suspect (from experience) that you won't know what you're doing with all the paperwork and they'll have to put in a lot more time babysitting you through the process.
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Jan 24, 2013 20:52
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When I was just beginning the home buying process and exploring areas and figuring out what I wanted I was all idealistic about taking the middle man out of the process and I thought I could save money by dealing with FSBO. This was end of 2007 thru 2008 after the market peaked and things had come down quite a bit, but before the bottom fell out of the economy. Almost without exception the sellers priced their homes way high, like 2005 levels. Nothing was competitively priced and I ended up buying one that I picked out myself on the MLS. As it turns out it started out FSBO at $700,000 and when they couldn’t sell it 18 months later they listed it with an agent who started out at $575,000 and kept dropping the price. I paid $460,000. I’m all in favor of FSBO when the owner is willing to meet in the middle, not be stubborn about some mythical number that they think they deserve. Which is about 95% of them.
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Jan 24, 2013 22:02
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Zeta Taskforce posted:I know I encouraged this debate, but no one is changing each other's minds. Everyone gets to make a closing arguement/parting shot, but then that's it. Sorry about the backseat rear end-kissing but this is about the nicest and most polite re-rail attempt I've seen. Very classy. I'm not here to add my $.02, so you're welcome everyone for saving you another meaningless opinion to read.
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Jan 24, 2013 22:28
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Zeta Taskforce posted:I’m all in favor of FSBO when the owner is willing to meet in the middle, not be stubborn about some mythical number that they think they deserve. Which is about 95% of them. I'm thinking that from the seller's perspective, FSBO is a big risk, at least right now. This is a buyers' market, almost everywhere. Buyers have a wealth of houses to pick from at all price levels. By extension, so do their agents. So, the seller has to ask himself: is it likely that if he used a sellers' agent, and offered the standard commission, he'd get a better price in the end for his property? For example, basx is "saving" a total of 4% by not using an agent (3% savings) plus offering only 2% to the buyer's agent (1% savings). But if he scares away half his potential bidders, and the other half have agents who are unenthusiastic about the property, I think it's quite likely he could get 5%, even 10% less for his property than otherwise. We have also at times in this thread bemoaned the obvious and blatant conflict of interest when a buyer's agent is also a selling agent and he shows his buying client houses he's listing himself for sale. Not only does he get the whole 6%, commission, he also has an obligation to his selling clients to see the highest price possible. The fact that buyers' agents are paid as a percentage of the sales price also represents a conflict of interest all by itself, because there's a financial incentive that is opposite to the client's interest. So there's a double-whammy against the buyer and that's why we caution people about this situation. But from the seller's perspective, his interest is perfectly aligned with the sellers' agent! Both he and his agent want the maximum price, both get more money the higher the home sells for. 3% may be a lot of money... and in a sellers' market, perhaps it's unnecessary. If your house is reasonable quality and priced reasonably, you'll attract lots of bids, and the buyers will do whatever it takes to get the house they want. Their agents will just have to deal with less compensation and a seller who hasn't got a professional agent to work with, because the alternative may mean no commission at all, or perhaps many weeks' more work to earn that check. But in a buyers' market like this one, where buyers are free to walk away, bidding wars are rare or nonexistent in most markets, offers routinely come in under the asking price, there's little penalty to a buyer for walking away... why would a seller do anything to discourage interest in the property? So yeah, it sucks that sucking up to the buyers' agent is necessary, it sucks that those agents have influence over their clients and may act in their own interest instead of that of the clients. But if there's 30 houses for sale this weekend which generally satisfy the buyer's agent's client's needs, and 28 of them offer the standard 3% commission, you better be one of those 28 or you're not going to get the bid. I think it's very likely that will cost you far more in the long run than your 1% or even 4% savings. Leperflesh fucked around with this message at 23:24 on Jan 24, 2013 |
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Jan 24, 2013 23:19
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Leperflesh posted:But from the seller's perspective, his interest is perfectly aligned with the sellers' agent! Both he and his agent want the maximum price, both get more money the higher the home sells for.
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Jan 25, 2013 01:16
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Dik Hz posted:The authors of Freakonomics debunked this statement. They found that sellers' agents are disinclined to get top dollar. Their real incentive is to close as many houses as fast as possible. If they can get 90% of the commission in half the time, they'll take it and move on to the next sale. I would say that the authors of Freakonomics have a good point. Of course, the seller must actually accept an offer, and can reject it, so the seller's agent cannot "force" his client to take an early (low) offer. Although he certainly can advocate for it. Just as a buyer's agent can suggest to his client that he should make a higher bid, or that he should buy a house he sees on the first weekend rather than waiting to see what's available next weekend. But my point is that the seller's agent's interest in a higher commission is aligned with his client's interest in a higher sale price. While the buyer's agent's interest in a higher commission is contrary to his client's interest in a lower sale price. In this way, the seller should have more incentive to retain (and pay) an agent than the buyer. Leaving that aside, there is also the matter of reputation. Real estate agents live and die by their reputations, and successful agents work hard to have happy customers, because word-of-mouth is still huge in this industry. A seller's agent whose clients realize within a few weeks or a month or two that they could have held out and gotten a better deal (such as by seeing comps pop up in their area that sold for a lot more) might be more likely to say bad things about how their agent pushed them to take a lowball offer prematurely. So, the Freakonomics guys' findings may reflect which influence is more powerful, but I don't think they're drawing a conclusion that sellers shouldn't use an agent. Basically my opinion is that basx's blanket condemnation of real estate agents as being rapacious unethical bastards is unfair and overblown, especially in the case of a seller using an agent; and I think if readers of this thread were discouraged from getting an agent as a result of his dire warnings about those evil jerks who want to be paid the standard going rate for their services, they might well be acting against their own interests.
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Jan 25, 2013 01:32
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Leperflesh posted:I would say that the authors of Freakonomics have a good point.
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Jan 25, 2013 02:40
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Dik Hz posted:I read basx's statement as saying that realtors can be really shady so don't trust them blindly. I must have missed the part where he said that they're all condemned to being rapacious unethical bastards. I don't think that at all. I'm advising buyers to avoid blindly trusting someone who has a huge incentive to act in their own interest rather than their clients. With Zillow and Trulia, it's so easy to find homes that meet your needs that there's really no excuse to not to do your own research, especially if your broker gee-golly just can't seem to get an appointment with certain homes that happen to have lower commissions. Likewise, not all FSBO sellers are slack-jawed dullards who smear feces on the disclosure template and paste it to the ceiling. A five percent commission made sense the first time I sold a home. And the second time. But not this time. Ten grand is still an exorbitant sum to manage paperwork and provide a conference room to sign papers in. I'm not saying realtors don't have expenses; they do. I'm saying the value they provide has plummeted compared to what it was in the age of dot matrix printers and free AOL CD's, when people still looked at things like real estate flyers and newspapers. Is this a buyer's market? Yes. But your bargaining position hasn't just changed with regard to home prices. It's also changed with regards to what you pay a realtor, if you choose to do so (which, by the way, I heartily advise for any first-time buyer or seller).
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Jan 25, 2013 03:51
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basx posted:Is this a buyer's market? Yes. But your bargaining position hasn't just changed with regard to home prices. It's also changed with regards to what you pay a realtor, if you choose to do so (which, by the way, I heartily advise for any first-time buyer or seller). As a recent first-time home buyer, I whole-heartedly agree. Sure, it was a "buyers market," but that meant competition for any good property was absurd with dozens and dozens of offers immediately upon listing. I hit the jackpot with my agent, who was a personal friend. Sure, I had the Internet- but he would put in so much legwork that I just couldn't do with a full time job, and calm my nerves / help me strategize in a bidding war where I had no reference whatsoever. But he was probably the exception -- at one point we visited a property that had notably fewer offers, and he noticed that the property had only a 2% commission. Which in my case was an example of how open and honest he was, but maybe speaks to the point made above. So I guess my overall point is to agree with yours -- hour by hour? Maybe not worth 10,000 in labor. But like you said, value added for a first-time home buyer? Immeasurable.
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Jan 25, 2013 09:03
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basx posted:Ten grand is still an exorbitant sum to manage paperwork and provide a conference room to sign papers in. I'm not saying realtors don't have expenses; they do. I'm saying the value they provide has plummeted compared to what it was in the age of dot matrix printers and free AOL CD's, when people still looked at things like real estate flyers and newspapers. I don't think they keep as much of it as you think. Regardless, your advice of "don't blindly trust your agent to find you the best houses" is great advice, but it doesn't make the realtor "scum" to want to work with the houses that will provide them more income instead of your house which will provide them less. If you offer less than current market price for a service, you should not be surprised when you get fewer than average people wanting to provide you that service. Everyone always objects to other people trying to maximize their earnings, unless it's them.
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Jan 25, 2013 15:28
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Cocoa Ninja posted:As a recent first-time home buyer, I whole-heartedly agree. Sure, it was a "buyers market," but that meant competition for any good property was absurd with dozens and dozens of offers immediately upon listing.
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Jan 25, 2013 15:49
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Sophia posted:I don't think they keep as much of it as you think. Like every consumer in the history of the world, I care more about the value I get for my money than the cost of providing said value. Prudential, ReMAX, et al have bloated overhead costs, very few of which add much value to the process in 2013. Just like record companies and travel agencies, the real estate industry has been and continues to experience disruptive change that will ultimately benefit consumers and lower costs. It's natural to resist that change, especially when it coincides with a collapse in the housing market, a double-whammy that derailed a fairly lucrative gravy train.
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Jan 25, 2013 16:09
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Cocoa Ninja posted:As a recent first-time home buyer, I whole-heartedly agree. Sure, it was a "buyers market," but that meant competition for any good property was absurd with dozens and dozens of offers immediately upon listing. This sounds like locally you have a booming housing market and it's a sellers market. Where I am rents are at all-time highs, housing inventory is very low and median home sale prices just broke above the previous 2006 peak. We're definitely seeing a full recovery in some places, except now it's harder to get a mortgages and rents are really high too.
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Jan 25, 2013 16:22
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basx posted:Like every consumer in the history of the world, I care more about the value I get for my money than the cost of providing said value. Prudential, ReMAX, et al have bloated overhead costs, very few of which add much value to the process in 2013. Sure, but like every worker in the history of the world, realtors gravitate towards maximum compensation. I'm not saying what you're offering to buyer's agents won't ultimately be a new market price-point that the industry accounts for by cutting overhead. But right now what you're offering is lower, so you can expect lower levels of service. If you want more service at this moment, you will need to pay more money for it. That doesn't make realtors who avoid your property "scum" or shady, it makes them people. It doesn't matter what you personally think the value of their services are if a large number of other people are will to pay what they want, I guess is what I'm saying. If you aren't comfortable raising your commission I'm definitely not saying you should, but you're not going to get the same business as the guy across the street who is. You are competing for their services by offering them money to help people buy your house. Complaining about their lack of enthusiasm to push people towards your house as if you didn't directly cause it by offering them less money is a bit hard for me to swallow. Sophia fucked around with this message at 16:40 on Jan 25, 2013 |
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Jan 25, 2013 16:37
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Sophia posted:I don't think they keep as much of it as you think. Regardless, your advice of "don't blindly trust your agent to find you the best houses" is great advice, but it doesn't make the realtor "scum" to want to work with the houses that will provide them more income instead of your house which will provide them less. If you offer less than current market price for a service, you should not be surprised when you get fewer than average people wanting to provide you that service.
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Jan 25, 2013 17:02
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gvibes posted:They are supposed to be acting in their client's best interest. It's right in their code of ethics. "When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client." If they are acting in their best interest when it's not in the buyer's best interest. Maybe scum is a bit strong, but it's probably against their code of ethics. Exactly. The one who violate that code are who I refer to as "scum." I have no qualms with a realtor telling their client up front that "I won't tell you about houses that don't meet my commission requirement." But I doubt that happens much. My problem is with agents who violate their buyers' trust, which from a FSBO seller's perspective, is common enough to warn first-time buyers about in a thread about buying homes. (And if you're a realtor who doesn't understand that distinction, you're probably in the scum category.)
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Jan 25, 2013 17:21
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Can anyone recommend a book or some other guide for people that have never sold a home before? All this talk about avoiding realtors has peaked my interest. I don't need to sell my home in a hurry and I want to break even so avoiding a realtor would definitely help with that. The only experience I've ever had with a realtor (This was before I was a penny pinching tightwad with a degree at BFC university) was the guy my wife used to buy the home in the first place. It didn't take us very long to figure out he was somewhat incompetent but we had to use a realtor in order to bid on a foreclosed home (through HUD) and to visit the property. On one occasion my wife and I needed to see if the HVAC and heating still worked so we had to spent a little money to get the electricity turned with the gas. My wife and I had to work and we were told that the circuit breakers all needed to be turned off in the house or they couldn't turn on the power. We called the realtor and he said he went to the house and turned them all off. Well it turned out he lied to me and they couldn't turn on the power so they had to come back another day. We forced him to pay the bill but I couldn't help but be further annoyed when I saw how much he was paid just to unlock the door, make the bid and turn the power on. Ridiculous. Sephiroth_IRA fucked around with this message at 17:42 on Jan 25, 2013 |
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Jan 25, 2013 17:32
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My buying agent was mainly just responsible for making sure I followed the correct protocol, helping me get my offers properly presented, etc. Who needs someone to help them find a house anymore? You can literally window shop almost as well as they can now with tools like Redfin, Trulia and Zillow.
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Jan 25, 2013 18:14
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Yeah, I've never really looked into what a realtor does and assumed they did stuff besides just finding the home and I suppose negotiating the price for the client. I'm definitely going to start reading up.
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Jan 25, 2013 18:20
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My buyer's agent spent six months driving us to something like 40 or 50 properties, going through each one with us and pointing out the plusses and minuses. He advised us on the procedure for making a bid, answered questions about short sales, foreclosures, FHA restrictions on properties, and told awesome jokes. We went and looked at some houses without him, but we were only able to actually go inside homes that were having an open house (rare for foreclosures). So often we would walk around the outside and if we thought the house showed promise, we'd go back with our realtor on the weekend to see the inside. We could not possibly have found or bought our house without his help and I think he more than earned his 3% of $240k after all that work. I'm sure there's situations where you don't need a realtor all that much and it's maybe just a guy signing a few forms in an office for you. Especially if you buy a conventional home and only spend two weeks looking at them before picking one and go with a conventional mortgage and the sellers' agent fills you in on what steps you need to take to make a bid and so forth (even though that's not really his job). But my experience was extremely positive and I think maybe a few people here who have had bad experiences are drawing a blanket conclusion where they shouldn't.
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Jan 25, 2013 18:44
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Absolutely. I think my comment came across wrong. My buying agent got PAID - and even though he didn't research new homes for me (my wife and I did that on our own) he still earned his money. My point was just that a good buying agent's focus probably isn't on finding homes as much as it is scheduling the visits and managing the transaction. If anything, the fact that it's so easy to shop for homes now probably means there's more work for the buying agent to do. In the past, he may have had to work hard to find 8-10 suitable houses to show. Now he has to deal with educated buyers who come armed with lists of 40-50 houses to visit and they know the market. It's much more time-consuming for the buying agent. In my experience, the real value came from the time invested (we looked at 75+ houses over 3 months) and the loan expertise. It was really nice to have my buying agent also work for the mortgage wholesaler. He had a vested interest in getting the loan done properly and quickly, he was an expert in the paperwork and understood the various time and qualification constraints related to getting a mortgage. I was so happy with the level of service that I re-financed with him 10 months after purchasing.
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Jan 25, 2013 19:36
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Agents are unnecessary if you are willing to make a whole lot of phone calls and emails yourself. I'd say having an agent is actually a liability in some ways. We ran into tons of listing and sellers agents who would tell us all kinds of information about their client. "They're really desperate to sell because his new job is so far away." Hey, thanks! Now I know they'll cave on price. My listing agent pressured me to accept the first offer and counter with lower offers. My buyer's agent pressured me to bid higher. She also did things like taking me to more expensive houses than I wanted, ones that did not meat the requirements I had, or taking us to her own listings (buyer agents are often listing agents as well). Anything to get more commission.
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Jan 25, 2013 21:45
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Weinertron posted:This sounds like locally you have a booming housing market and it's a sellers market. Where I am rents are at all-time highs, housing inventory is very low and median home sale prices just broke above the previous 2006 peak. You're probably right, although its interesting to note that we often weren't necessarily outbid by that much. Usually it was us versus an equivalent all-cash offer, or a rental company buying the property that would let the owners rent for three more months. Intangibles that greatly reduce the risk for the seller compared to us, first-time buyers with a loan in this economy. And it was aggravating to deal with sellers agents that would tell us to our face "I'm not recommending your offer because you're a greater risk." Even if it was true... 
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Jan 25, 2013 22:00
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I have a question not specifically about buying a house, but the home inspection. Is there anything specifically to look out for when choosing a home inspector? Looking at friends of mine who have bought and their inspectors, I've come to the conclusion that really good ones may or may not have professional websites and may have been inspecting homes for just a couple of years or most of their entire life (basically it's a complete crapshoot trying to figure out which ones will be "good"). My realtor has referred one who is available next-day upon finding a place, and they have the required state certification. They're not a member of ASHI, but they are of NACHI, which I hadn't heard of before this. I also contacted them for a sample home inspection report, but they said they don't share those until an inspection has been paid for so their contract verbiage and report structure won't be copied by competitors. That seems off to me. Is there anything specific I should ask them over a phone interview to further check them out? Does anyone know if the NACHI is reputable? Is the withholding of sample reports common practice and a sign of anything? I've noticed that about an equal number of other inspectors in the area do and don't share reports.
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Jan 26, 2013 17:18
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PageMaster posted:Is there anything specific I should ask them over a phone interview to further check them out? In my experience, inspectors are going to tell you the same basic things about their process, I'm not sure you'll be able to glean much of value over the phone except perhaps a read into their general personality/character. One thing you might ask is if they use thermal imaging to identify possible sources of moisture in walls/floors/ceilings which could indicate dry rot or other issues. Also check to see if they do any invasive inspecting- for example I've seen inspectors use thin sharp metal probes to poke very small holes through drywall, joists/beams in crawlspaces, etc. where they detect or suspect deterioration. NACHI looks like an online certification that doesn't require much except $499 to take the course. I wouldn't put much stock in it. ASHI on the other hand requires applicants to have 250 paid and verified inspections before they can be certified. If you don't have a solid referral from someone who doesn't have a direct or indirect financial interest in the inspection outcome, I'd go with someone with ASHI certification. I used to work with a home inspector and he'd never give out a full report. Sometimes he'd show people a page or two but that's it. Note too that a full report can run 30-40 pages or more. Then again he was well-established and got steady work through referrals and didn't need to do any marketing, so I don't know if this is common practice or not.
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Jan 28, 2013 01:46
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Here is the bulk of a random advice email I wrote up for a couple of friends that are first-time homebuyers; I figured it could do some people some good here. Some links or prices may be location-specific, sorry if you are lucky enough to live somewhere else. Enjoy your low cost-of-living-to-income ratio. I am not an expert, have only bought two houses/sold one house. Some of this poo poo may be wrong, and if someone points out something wrong I'll remove it, but I'm mainly posting for the advice about meeting neighbors, spending time in the neighborhood, going to town offices, scouring the assessor's databases, etc. All of that stuff led to some of the more valuable insights during our current dreamhouse acquisition. Good luck, you are about to hate life forever, hopefully this stuff will help minimize the hatred. Demographics Mass Stats town-level demographic mapping UI, worked great for us. City-Data has a different presentation of similar data, sometimes broken down within towns as well GreatSchools has good school data The Search Redfin is what I’d say is the best interface (including iOS) and overall site. Search a town, modify search options to show sold homes for all time, and you have a map of where you should be looking (after adjusting for real estate prices for sales more than a couple months ago). Realtor has a great heat map display within their map, showing you the neighborhoods to focus on within towns based on your spending habits. Zillow has their (in)famous zestimates, and I believe their maps can show recent sales as well. Trulia has some good demographic/stats/trends I believe Town websites! More and more towns are going to public databases and GIS Mapping of their data, including assessment data. For instance, our town has a GIS mapping section that tell you lot dimensions, where the flood zones are, whether you’re going to be next to wetlands and can’t wash your car without your neighbors calling the EPA, who owns the houses, the transaction history with prices, assessor’s data like room dimensions and grade of construction, among other useful things. From a specific property you can hit “Property Record Card” that takes you to the database of assessor’s info. Real Estate Agents We wound up not using a buyers’ agent for a couple of reasons, but I just wanted to mention that if you want to keep this option open, DO NOT sign anything anyone puts in front of you. This includes the open house sign-in sheet for that house you want to look at. You will probably get dirty looks and maybe even bullied, but this is because everyone wants to be the one to claim the 2.5% commission for being your buyers’ agent. In our opinion, this is money that’s on the table and if you fancy yourself a good negotiator and are willing to do a lot of research yourself, YOU can claim this money. You will never know if you’re successful or not because concessions between the seller and sellers’ agent will never be seen by you, but we’re convinced we got some of that money in our transaction. This is probably overkill, but we never felt that we did ourselves a disservice by not signing anything. Not knowing much about real estate law we were trying to avoid giving anyone our "cause to procure," which I believe is real estate agentese for "gotcha, bitch." Contrary to the above advice about not associating yourself with any realtors, I’d sign up for someone to send you MLS updates. You set up search parameters and you get updates as they hit MLS, which is maybe faster than the other services and catches more of the properties? It is also important if you want some running data on sale-to-list information for houses. One of the things you’ll find is that once a house goes under contract, it disappears from the real estate sites (so you don’t remember what it was listed at or what the pictures were like), and doesn’t show up for a while in the registry/assessor’s databases, where you can find out what it actually sold for). However, we got this info by periodically snapshotting the MLS list (screenshots or pdf), and every month or so the agent would send us a PDF of recently sold properties (we had to ask for this each time), which she has access to much faster than you will be able to find them. This lets you develop the discount you should be negotiating towards, which was our most important task as people without a buyer's agent. I have folders full of listings which I saved, then they went off the market and were subsequently useful after the fact for comparison etc. Sometimes individual realtors’ personal sites show their listings, including sold ones, which can be useful too. Check for local superstar agents, check their websites often. Again, more data is better, and unless you watch the market over months or years sometimes there are not a lot of samples on the market at any one time. Financing Financing is probably going to be personal. Depending on your situation, different banks are better for different people. For instance, our bank was more flexible and helped us to stretch where we needed it. For preapproval this isn’t absolutely necessary but when it comes time to finally choose which place to fully apply with, make everyone give you a Good Faith Estimate. It’s a particular form that is (I believe) particularly binding on the bank’s part. As such, some will try to avoid giving it to you, to the point of belligerence in some cases. Even our contact at the bank we went with, who was super-nice and spent a ton of time with us, turned into a psychopath when we asked for a GFE. "I HOPE YOU'RE NOT CONSIDERING GOING WITH ANOTHER BANK AFTER ALL WE'VE DONE FOR YOU..." Subjectively, she had a point, and they were really helpful etc. but that's unprofessional and hey lady, it's business, it's other peoples' money, etc. General Advice Set up a throwaway Gmail address that you can use for everything related to the purchase. This way it’s easy to set up filters to ignore the spam everyone will blast your way, everything is self-contained, and you can just walk away from it (and all the junk) when you’re done if you want. You absolutely will get daily updates from some of the people you give your address to. Buy a good quality medium to large D-ring binder and put everything related to your search in there. When you find a house you want to put an offer in on, empty it out and start filling it up with stuff related to the house, mortgage, insurance, etc. Get everything in writing. Real estate agents can and will break verbal agreements when money is on the table. Do as much due diligence as you can stand. For example, when shopping for a loan, lawyer, mover, inspector, etc. I am instantly skeptical of anyone recommended by the realtor you’re working with due to the conflict of interest. I believe it pays off to find people as independent as possible, and this costs time and effort to find and sometimes more money to hire. Go to the town office and ask for everything they have on the house you’re considering once you get to that point. We got as-built septic plans/permits/installation data/pumping records, plot plans, well water test results and installation data, floor plans, permits, insurance claims, Title 5 certificate, and more. Call around in the town offices and ask questions. Get friendly with the planning board, they can tell you if the developer you’re buying from is always in court with the town because he interprets the rules creatively. Get friendly with the health department, they can tell you about violations and what to expect from well water results. Get friendly with the town clerk, they can tell you about the water damage insurance claim that was filed on the house you’re looking at but the sellers “forgot” to disclose. While you’re in line at town hall trying to dig up records on a property, you just may meet a developer in there filing for a permit that knows a bunch of useful stuff about the neighborhood you’re looking at, and has good contractor recommendations. All these things happened to us. It takes time and arguably we did it because we weren’t working with a real estate agent, but then again you can never have too much information in my opinion. If you’re buying in a development, find out about the builder, you will eventually find out where else they build (other towns) and can go visit THOSE neighborhoods and town offices to see if the builder has a reputation for quality or junk/leaving developments half-finished or whatever. Town libraries can be a good source of information as well. Chat up the librarian. She's bored and probably knows who in town is a crook. If you have the time and inclination, just drive around a lot. Find neighborhoods you like and visit them over time. Go to open houses for houses you aren’t even interested in. You’ll get a better sense of what’s important to you (as well as what the showing agents want you to think is important), as well as the realm of the possible of features you can find in your price range. You can fairly quickly start to form your own opinions on WHY this house has been on the market for a year and a half, or why that house that you went to for the opening weekend open house was gone in four days. Over time you will also find landmines that you would have missed if you rushed the process. That house next to a gravel pit that you drove by on Sunday and it looked wonderful? Monday through Friday from 6 AM to 7 PM there are semis using their engine brakes right outside your front door as they slow down to turn in. That house with the beautifully landscaped lot? Drive by during a thunderstorm and take note of the pond that used to be called the side yard. That great neighborhood? Drive by during rush hour to find out the only good way to commuter routes is to sit in a line for 20 minutes only to take a left with no stoplight onto a blind curve where no one will let you out. Quiet neighborhood? Not on Saturday mornings when they’re skeet shooting at the rod and gun club a half a mile away. Want to enjoy that beautiful yard? Not for two months out of the year when being downwind of the small dairy farm a few houses down means your yard smells of concentrated liquid cow manure. We did this driveby over time approach with a bunch of houses and neighborhoods. Since one of our top priorities was the friendly quiet neighborhood thing, one thing we noticed was that every time we were in the neighborhood of the house we eventually bought, everyone in cars and in yards or on the sidewalk waved to us and smiled. Like 95% of people over 10-12 drive-bys over a few weeks. Kind of a silly thing, but that stuck out a bit, as no other place we visited was like that. Some of the other “nicer” neighborhoods, we got a lot of “who is that, I don’t recognize that car” looks and we joked that we were probably getting on some pretty choice crime watch lists. Again, a small thing but just putting yourself around the houses you’re interested in can give you some interesting information. See if the towns have newcomers’ clubs or associations. We joined ours way back when we were still looking. My wife went to some of the events where all people do is gossip about their neighbors, the towns, the schools, the services, etc. Good information. If schools are super-important to you, call the schools and ask if they have a program where you can come in and talk to someone about the schools. We didn’t get a chance to do this due to summer but we got this recommendation from a friend who moved from Town X to Town Y. The result: Town X didn’t really want to have them in for an appointment, showed them around hastily, seemed put out by having to talk to them, etc. Town Y: had a program specifically for people interested in the schools, were very enthusiastic and proud to show off the schools and talk about the curriculum, etc. It’s anecdotal and you can argue that it’s marketing, but it was an interesting comparison and can tell you a little about who will be teaching your kids. If you find a house you might like, definitely talk to the neighbors. I just drive around until I catch someone, and ask politely if they can tell me a little bit about the neighborhood, and have never been turned down and ALWAYS get something useful out of it. I can’t remember all the good information I got from these trips, but people will tell you a lot. One question I like to ask is whether there’s anything they wish they could change about the neighborhood, or something they wish they knew when they were buying. They’ll tell you if the road is used as a drag strip or if you’re directly under final approach for the local airfield or if the homeowner association is embezzling their fees, etc. You can find out who may be selling in the future, maybe they will tell you about the reasons the house is on the market, tons of good stuff. For budgeting, go shopping as if you had to furnish and maintain the house. Write down the MINIMUM you’d be willing to spend (zero if you’re willing to eat off the floor, $2k if you’re super-thrifty craigslist shoppers, $40k if you want to walk into a chain store and completely fill the house with new mid-end stuff and won’t settle for less, etc.). Include a couple grand for really nice blinds that you forgot to make sure were in the P&S. Depending on the age of the house, plan to replace the roof and boiler in the first couple years at $8-$12k and $5k respectively. That nice clapboard exterior may need $4k in paint every 5 years. You’ll probably want a basic low-end John Deere riding mower at >$2k, and to get out of your sweet 500’ driveway in under an hour in the winter you’re going to want a >$1.5k snowblower. Add all this up and subtract it from what you think you have for a down payment. I’m only partly joking. I’m sure you’re budgeting for all this stuff but I just wanted to reiterate that there is a pretty large cost of home ownership aside from just the house and utilities. If everyone was conservative and risk-averse and followed all the advice, no one would ever buy a house, but it’s worth being aware of the types of stuff that can start adding up as you get into a house. uwaeve fucked around with this message at 19:12 on Jan 28, 2013 |
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Jan 28, 2013 19:10
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uwaeve posted:One of the things you’ll find is that once a house goes under contract, it disappears from the real estate sites (so you don’t remember what it was listed at or what the pictures were like), and doesn’t show up for a while in the registry/assessor’s databases, where you can find out what it actually sold for).
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Jan 28, 2013 19:20
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That is a good post uwaeve, especially the general advice. I'm still in favor of realtors for most buyers (in particular, most first-time homebuyers, which is the large majority for this thread), but you've got good info for people who choose not to use one.
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Jan 28, 2013 19:31
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Could someone who knows about owner financing or rent-to-own give me some information? More than just the basic concepts, but how to actually take all the steps to transfer it legally. Documentation, tax implications, etc I’ll try to explain my situation as much as possible to paint the clearest picture. I moved back home to save money while going to school, and now that I’m done, the plan was to move out. However, instead of paying $1,000+ a month to a landlord which I get no return on (though I know renting is not always a waste) I plan to use the $1,000 to buy my parents’ house instead and split it into two separate units. It already is sort of a two family. It has kitchens on both floors, but one was made into a bedroom, go figure. I’m actually set to inherit the house, so there’s no real reason to buy it from them, but at the same time, not only do I owe them for their help over the years, they have nothing saved for retirement, so they could use the extra income once they retire. I’m not entitled to help, but I want to. I would rather the money I would otherwise spend on rent go to them. Plus, I can bring in a friend to rent out a room and get an extra $500 income coming in. My parents aren't planning on going anywhere or buying a new place, so getting all of the money up front is not an issue as far as I know. I definitely can’t get a home loan with the position I’m in (not a great credit history, will only be making around 32k a year), but I can more than afford the money I would pay them. I just don’t know how the owner financing works other than the seller is the one assuming the risk. My father said he is willing to do that, so once we sort out all the legal issues we’ll move forward with it. The house is entirely paid off, no mortgage. The difference between owner financing and rent to own is that with owner financing I take over as the owner up front and pay the seller as the agreement states, right? And with rent to own, I pay the seller rent money, and an agreed upon percentage goes to the purchase price until I have enough equity to get a mortgage? Either would work for me, but I would like to avoid the home loan if possible. Saves on closing costs, interest, PMI, etc The last issue is getting the money to fix up the home. I plan to be the one to pay for all remodeling. Like $100,000+ worth. But If I took over as the owner, I doubt I could get a home equity loan, or at least not with favorable conditions that my parents could get. What would the legal implications be if they were to take out a loan to start the renovation process and then I were to buy it? I’m sure there are things I’m missing, but this is for starters. Moneyball fucked around with this message at 20:43 on Jan 28, 2013 |
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Jan 28, 2013 20:38
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Once you have the details worked out with your parents, it would absolutely be worth the money to hire a real estate lawyer to write up a contract and make sure all the legal issues are squared away. The lawyer should be able to answer all your questions, ask any questions about issues that you may have missed, and write a clear, legally binding agreement that encapsulates everything you discussed and meets all legal requirements. This isn't something you should be doing yourself, the stakes are way too high and it could get extremely complicated and ugly if there is a misunderstanding or falling out between you and your parents.
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Jan 28, 2013 21:52
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