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Have you had a lawyer look at the contract you signed? It sounds like builder is going to meet you halfway, which the contract doesn't require. (Which makes sense since you both have skin in the game now). Personally, I'd just pay the $3K and be done with it.
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Jun 15, 2013 18:15
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Yea, I would not walk and grin and bear it. You are heavily invested, and what is your fall back if you walk?
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Jun 15, 2013 19:06
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I'm not really looking for advice, just want to mope a bit. We had "our" house we're buying inspected last week, and it turned out pretty bad news bears. Most alarmingly, it needs a whole new roof because of severe hail damage, and after some investigating we've learned that they filed a claim with insurance for it last year but nothing ever materialized. Who knows why not. Their sellers disclosure paperwork said they had no known problems with the roof (OR ANYTHING) so we know they lied there at least. In addition, they appear to have never changed their air filters or done any sort of maintenance on their 2008 AC system, and the inspector suspects it needs a new evaporator coil (but we'd have to hire an HVAC guy to be sure) and ducts will certainly need cleaned. I believe all of the windows have broken their seals, and most of the windows face west, in Texas, so energy efficiency is important to us. The realtor warns that just replacing the panes will probably only be a temporary fix, and she'd recommend all new windows. The master bath's jetted tub's motor does not work, and their remodeling of the bathroom has hidden the access panel. Regardless, the tub has two cracks in it, indicating we would really just need to tear out the whole thing and replace it. The insulation used in the attic was the bare bones minimum 20+ years ago when it was built, and he recommends more/better, and there is a rodent-chewed live wire in the attic as well. The foundation is in good condition other than a corner pop, but there is rain water ponding at one location and the inspector recommends gutters and eventually a sprinkler system, but a soaker hose is okay for now. Several parts of siding and trim are wet rot damaged and need replaced. This is everything off the top of my head, but there were other minor things and obvious quick-fixes observed as well. The sellers are also keeping the property's mineral rights, and my realtor has asked and asked and asked why, if there are any leases on the property, but they will not respond. The buyer has a right to know!! So, since we are willing and prepared to treat it as a project house, we amended our offer to be $30k less. We'll see if they go for it, but I doubt it. They paid more than that for it in 2007, so I doubt they want to take a loss. And they have 4 other offers waiting for them to fall back on (though, they will have access to our inspection information now). We're pretty much leaving it up to fate, now. It's their own fault for not taking care of their home.
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Jun 17, 2013 15:25
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A good realtor would tell them they'd have to eat a lower offer from any future buyers anyway. And the other offers will get access to that information too on the repairs needed. Basically, don't be the sucker. If someone else wants to take the house as is with an offer close to yours, let them. Insane Totoro fucked around with this message at 15:38 on Jun 17, 2013 |
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Jun 17, 2013 15:33
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So what would happen if I paid an additional $12,000 (a years payment) on the mortgage this year? Would that mean I could live payment free for 12 months or would the monthly payment simply adjust and I would have to start paying that month to month? Even if it's not the latter I already realize it's a bad idea but I just kinda what to know what would happen.
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Jun 17, 2013 17:32
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Orange_Lazarus posted:So what would happen if I paid an additional $12,000 (a years payment) on the mortgage this year? Would that mean I could live payment free for 12 months or would the monthly payment simply adjust and I would have to start paying that month to month?
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Jun 17, 2013 17:42
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Orange_Lazarus posted:So what would happen if I paid an additional $12,000 (a years payment) on the mortgage this year? Would that mean I could live payment free for 12 months or would the monthly payment simply adjust and I would have to start paying that month to month? If you mark it as a payment to principal your regularly scheduled payment should stay the same, it'd just shorten the term of the loan. If you don't, they may decide it's a prepayment so you wouldn't owe for a while - but why in the hell would you do that?
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Jun 17, 2013 17:46
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If you're totally dying to "not make a mortgage payment for a year", open another checking account with your bank/credit union and put the $12k in there and arrange automatic payments for your mortgage. If you're the kind of customer who has an extra $12k kicking around, I'd expect everything about this to be free of fees. Unless you're applying it towards your principal, there aren't a lot of very compelling reasons to pre-pay. The only one I can think of is if you're going to go live in a mud hut somewhere with the Peace Corps for a year and want to ensure your mortgage stuff is taken care of.
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Jun 17, 2013 17:59
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Orange_Lazarus posted:Even if it's not the latter I already realize it's a bad idea but I just kinda what to know what would happen. It's actually a great idea to make extra payments on your mortgage. Normally each of your monthly payments goes to pay off the interest that has accrued that month, and then the remainder goes to pay down the principal. Depending on where you are on your amortization table, the portion of your payment that goes to interest can be anywhere from "almost none" to "almost all" of it. If you make an extra payment, though, you can apply 100% of it to principal. Do this every year and you can drastically reduce the amount of money you spend on interest, over the life of the loan. Of course, there is always an opportunity cost to doing this... if you are forgoing paying money into a (especially tax-sheltered) retirement account in order to pay down your home loan, you should consider whether you're passing up better gains from retirement savings in order to avoid cheap interest on your mortgage. The exact calculation depends on your mortgage interest rate, your rate of earnings from your retirement savings, whether or not you're under water on your loan, how long you plan to hold the loan, whether you want to expose more of your net worth to the risk of your home vs. the risk of your other investments, and so on. But if you have extra cash, it's worth at least considering the option.
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Jun 17, 2013 17:59
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Thanks for the advice folks. We went into the builder's office this weekend and offered to put in an extra grand from our already put up front earnest money. They countered with 1200 so we took that deal. This way we'll still get back a majority of the cash we've put up and we have peace of mind now.
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Jun 17, 2013 18:16
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Leperflesh posted:It's actually a great idea to make extra payments on your mortgage. Normally each of your monthly payments goes to pay off the interest that has accrued that month, and then the remainder goes to pay down the principal. Depending on where you are on your amortization table, the portion of your payment that goes to interest can be anywhere from "almost none" to "almost all" of it. That's how it works with my car loan. I actually pay more than the owed amount each month and the extra goes exclusively to the principal value of the loan, not the interest and priciple. I pay about an extra $100 each month and that extra money just comes off what I owe on the loan, not the loan plus interest.
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Jun 18, 2013 00:24
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If you have an Interest Only loan or an ARM that recalculates, a large principle reduction can lower your required payment. Just thought I'd add that info.
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Jun 19, 2013 05:18
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Closed on my first home on Monday with no issues and only about 10 minutes of signatures needed from us. The sellers only had about 15 minutes of signatures. Definitely not as bad as people were making it out to be. Went over yesterday to start painting some of the rooms to make it "ours". Thanks so much for this thread. It's been super helpful. Now to buy a million things.
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Jun 19, 2013 16:21
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We had our buyer back out with 2 weeks to go until close because his job is relocating him ( ). The title company apparently requires signatures from us and him to release the ernest money to us even though our sales contract states that it should go to us in this case. Does anyone have experience with a situation like this? If he doesn't sign, what are my options? Sue? We have rented an apartment and signed a lease already, so we have incurred real costs based on this sales contract.
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Jun 19, 2013 16:49
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Economic Sinkhole posted:We had our buyer back out with 2 weeks to go until close because his job is relocating him ( A lot of the time, yelling at the title company until they give you the money will work. Hopefully the guy will sign though. Failing that you sue the title company if they are holding the money, or the guy (or both) if they give it back to him wrongfully.
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Jun 19, 2013 17:09
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This is just a guess, but probably the reason for asking the guy to sign is for him to acknowledge that the deal hasn't been broken by anything that would count under his contingencies. Sort of a "I agree I'm responsible" statement, which helps to assure all parties that he isn't going to protest or attempt to recover the money on the basis that one of his contingencies were triggered. If he refuses to sign, it's time to lawyer up. It's likely a strongly-worded letter on your attorney's letterhead would convince him that litigation isn't in his best interests, so I doubt it would go further than that.
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Jun 19, 2013 20:43
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I don't know your state laws but because he decided that he didn't want to buy the house after all is not a valid reason to break the purchase contract. You should pursue damages beyond the earnest money unless it was significant especially since you have incurred extra costs. He can enjoy many trips back to your city for court dates.
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Jun 19, 2013 20:56
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I doubt it'll go that far, title companies will usually do the right thing in this situation. They just want everyone to sign something to cover their rear end, but former buyer seems pretty clearly in the wrong and it's their responsibility to give the earnest money to the non-breaching party.
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Jun 19, 2013 22:01
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Economic Sinkhole posted:We had our buyer back out with 2 weeks to go until close because his job is relocating him ( Unless he knew he MIGHT be relocated before entering a contract on a house, this is kind of a double-edged sword. On one hand, your house has essentially been off the market for a good bit of time while you've been under contract, and you have lost potential buyers as a result. On the other hand, if he didn't even have a smidgeon of an idea that this would happen to him, I wouldn't really say it's his fault. He may or may not sign; if he doesn't, that's a whole other can of worms. If he does, great. Does your contract SPECIFICALLY stipulate that you will receive his earnest money if he has to back out because of relocation? How long was the option period (if any)? At what stage were you in the sale process? How long did he have to obtain financing or provide written notice that he was unable to obtain financing? If he has to move somewhere and buy another house or spend a lot of money, he probably couldn't end up getting the loan anyway because the U/W will say no way; that's why I ask how long he has to obtain financing, because he could get his earnest money back on a financial technicality if that's how it's set up in your state. If he backs out for any reason other than a)couldn't obtain financing in the allotted time, b)undisputed right to terminate during option period for whatever reason(if your state has unilateral contracts as such) or c) objections to title restrictions or HOA restrictions (fat chance, he probably only had less than five days to object), then he can't and shouldn't get it back; it's restitution for keeping your house off the market for so many days and and backing out with no contractually-stated precedent. What state are you in?
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Jun 19, 2013 23:22
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Rurutia posted:We did our inspection and gave the report/requests on Wednesday night. I'm getting nervous because the sellers still haven't gotten back to us. How much longer is it reasonable for us to wait? Our realtor wanted something by Friday, and they told her that the sellers were under no obligation to get anything back to us soon. The sellers don't have to agree to anything you ask, depending on how much they want to sell their house. The main things are roof/foundation. Those things MUST be fixed for your lender to give you the loan. It depends on what you asked for. 1. What exactly did you ask the sellers to fix or replace? 2. Did you ask for a lot of things to be fixed? 3. How many of them were actual safety issues? I ask for a few reasons. For one, depending on the projected costs of what you're asking, they might need to look at their finances to decide what they can or can't do. If you ask them to replace a thermal window pane and they know they are going to have to pay out a deductible to have their roof replaced too, for example, they might opt out of the thermal window pane replacement because it's really not that big a deal. For another thing, if you sent them this HUGE list of repairs you wanted done and it was 90% things that were nowhere NEAR a big deal, they might be scratching their heads and thinking, "what the gently caress?" I'm in no way suggesting you were unreasonable in whatever repairs you requested be done, but I have counseled many of my clients out of asking for ridiculous things that would not affect them buying the house or really anything. I usually tell my clients to focus on the BIG things, stuff that will hold up their loan, safety issues, etc. Do you have an option period? If so, how long is it? The sellers are under no obligation whatsoever to adhere to your realtor's timeline because they don't have to respond at all, quite frankly. I am willing to bet that there is nothing in your state's promulgated contract form that states the seller must respond to your request. In either case, if your realtor is worth her salt, she will have a notice of termination of contract ready for you to sign on the last day of your option if you have an option period, and if you've heard nothing before midnight she should have you sign it and send it in to protect you and your earnest money. If they don't respond to your request and you don't terminate, congratulations, you're buying the house as-is because you've lost your leverage in the contract. However, in this scenario, if the sellers for whatever reason decide to agree after the fact, then great. But understand after option is over they have no incentive or reason to agree to do any repairs because yay, they're selling their house and don't have to spend any money to repair anything! If it's roof or foundation, they don't have to do this either but you need to terminate because you couldn't get a loan in that case. If their realtor doesn't suck he/she has already told them if they don't repair the roof or foundation then they will eventually have to do it for the next buyers or just not sell their house ever. If you terminate, you could ask your realtor to stress to the listing agent that you still want to buy the house, and perhaps you could resume where you left off with them if they agree to make the repairs. Otherwise, do not let your realtor put you in a position where you're locked into buying the house with no agreement from the sellers on repairs. I can't stress this enough. Have your realtor badger the poo poo out of the listing realtor about the repairs, and if you don't hear anything soon, terminate terminate terminate. Unless, of course, you can live with buying the house as-is. Best-case: They come back and agree to all your repairs. Almost as good: They agree to some, and not others, and you can live with that. Bad: They don't respond or refuse any repairs at all, and you decide you can live with that and spend the money to repair them yourself. Worst: Same as the Bad, except in this scenario you're not okay with it and you don't terminate and now you're buying a house you don't really want. TERMINATE if you do not hear from them. I'm serious.
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Jun 19, 2013 23:53
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life is killing me posted:Unless he knew he MIGHT be relocated before entering a contract on a house, this is kind of a double-edged sword. On one hand, your house has essentially been off the market for a good bit of time while you've been under contract, and you have lost potential buyers as a result. On the other hand, if he didn't even have a smidgeon of an idea that this would happen to him, I wouldn't really say it's his fault. He may or may not sign; if he doesn't, that's a whole other can of worms. If he does, great. We're in Oregon. There are no stipulations for relocating before closing in the contract. The only contingencies were inspection (long past), Condo/Townhouse HOA review (overlapped with the inspection period), and financing (he could use this one, I think). We were waiting for the appraisal report to come through to his lender (appraisal happened 7 days ago). We were scheduled to close on 7/5. As far as I can tell, the sale agreement only stipulates that he had to apply for a loan within 3 days of our acceptance of his offer, which he did. Following that, the financing contingency just says that "Buyer and Property to qualify for the loan from Lender; Lender's appraisal shall not be less than the Purchase Price". You're right, it's probably not his fault that he is relocating. On the other hand, it's not ours either, and we are the party that has suffered the loss of potential buyers and money, since we had to make living arrangements based on the sale agreement.
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Jun 20, 2013 01:13
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Any real estate agents from CA here? I have a quick question. We are in the middle of selling our house. We have accepted an offer well over asking. We and the buyers signed paperwork. In the last day something has come up which is pretty major where it might be required for us to stay in town. How easy is it to walk away from selling the house if we need to? The appraisal for the lender hasn't been done yet, but will be any day now, to give you an idea on where we are at in the process.
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Jun 20, 2013 01:20
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Economic Sinkhole posted:We're in Oregon. There are no stipulations for relocating before closing in the contract. The only contingencies were inspection (long past), Condo/Townhouse HOA review (overlapped with the inspection period), and financing (he could use this one, I think). We were waiting for the appraisal report to come through to his lender (appraisal happened 7 days ago). We were scheduled to close on 7/5. Judging by the fact that he applied for the loan it seems he intended to buy the house barring some disastrous problem, and thus his relocation probably blindsided him. That said, you are correct; from the title company's standpoint, the earnest money should go to you since contractually, he did not perform. In the end I don't think it matters whether this was intentional or not--he didn't perform and that should be that, earnest money to you. He probably feels differently however, because he's probably going, "gently caress, they KNEW I was buying a house, and they choose to relo me?" Both parties got slighted it seems, but the contract does not care about who took the most injury. I think the earnest money should and will go to you, but the ex-buyer might be looking for a way to get his earnest money back via finance addendum means, because he will almost certainly try to say that technically, he was unable to get the loan, and technically, that would be true. This is a hard one. As a realtor, if I was representing you I'd tell you to lawyer up if all else failed, but this hypothetical also assumes that I would know more about the contract than I do. I also don't know about the contracts and real estate laws in Oregon, so I don't know what other various and sundry laws and regulations govern contracts and termination. I wish you luck in this situation and hope you get to keep the earnest money. p.s. 7 days ago and the appraisal isn't in yet? Yeesh.
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Jun 20, 2013 01:32
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jabro posted:Any real estate agents from CA here? I have a quick question. We are in the middle of selling our house. We have accepted an offer well over asking. We and the buyers signed paperwork. In the last day something has come up which is pretty major where it might be required for us to stay in town. How easy is it to walk away from selling the house if we need to? The appraisal for the lender hasn't been done yet, but will be any day now, to give you an idea on where we are at in the process. I am not from CA, but do you have a realtor or are you selling it yourself? If you have unilateral contracts in CA then you can't back out without defaulting on the contracts and you would open yourself up to a lawsuit if the buyers wished. Or you could try mutual rescission and see if the buyers are willing to let you back out once you explain your situation to them. Circumstances change in life all the time and I am sure they understand that. In the end, not knowing about the contract forms in your state and the laws governing real estate there, all I can offer is possible outcomes to your situation.
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Jun 20, 2013 01:37
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Orange_Lazarus posted:So what would happen if I paid an additional $12,000 (a years payment) on the mortgage this year? Would that mean I could live payment free for 12 months or would the monthly payment simply adjust and I would have to start paying that month to month? I apologize if this is a stupid question, but do you understand how mortgage amortization works? If you do, throw every dollar at your house principal that you can, unless you have other debt. Early year house payments are basically all interest, so you gain nothing by only making payments- you are basically treading water (assuming a 30 year). Your $12K principal payment though, on what appears to be a very small or very long mortgage, will make a gigantic difference in your amortization table. let it mellow fucked around with this message at 02:21 on Jun 20, 2013 |
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Jun 20, 2013 02:18
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life is killing me posted:
What market do you work in? 7 days is the short side from what I have been seeing in the refi market, and when I bought my house a few months ago it was longer than a week.
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Jun 20, 2013 03:04
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therobit posted:What market do you work in? 7 days is the short side from what I have been seeing in the refi market, and when I bought my house a few months ago it was longer than a week. I work in a major seller's market, but appraisals here are coming in less than 4 or 5 days usually.
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Jun 20, 2013 03:11
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life is killing me posted:I work in a major seller's market, but appraisals here are coming in less than 4 or 5 days usually. My appraisal was ordered on a Friday, happened on a Sunday, and came back on the following Sunday. I would agree that the turnaround is pretty fast from my (anecdotal) experience.
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Jun 20, 2013 05:35
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Looks like we where not able to afford the big house. Too bad, so sad. The small house we got a much better offer than we expected though. Now all we need todo is get a loan. Talked to the bank today and apparently they can only finance us 80-90% of the way there due to new regulations. Our first loan (with our parents standing in for security) was 100% and I had figured this one would be too, but times change. At least we can swing the missing 10-20% ourselves more or less.
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Jun 20, 2013 19:06
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jackyl posted:do you understand how mortgage amortization works? If you do, throw every dollar at your house principal that you can, unless you have other debt. Early year house payments are basically all interest, so you gain nothing by only making payments- you are basically treading water (assuming a 30 year). Do you understand how inflation works? Paying year 2013 dollars to save year 2043 dollars is not necessarily a sound financial decision. Paying down early is not the tremendous financial win it appears to be if you just naively look at the amortization schedule. There are, of course, a lot of other factors that weigh into things (both for and against paying early); neither choice is obviously correct.
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Jun 20, 2013 19:46
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I suppose I don't understand how inflation works. The amortization calendar outlines a clear payment schedule and how it relates specifically to interest paid over the term. Making additional payments directly toward principal guarantees you will not pay as much in interest over the loan term. Inflation and other market fluctuation are not guaranteed, but your interest burden is and paying toward principal is guaranteed to lessen that burden. With APR being compounded based on principal it is most effective to reduce the principal early in the loan term. Seems pretty sound to me in direct terms. Am I missing something here? Moreover, I thought the question was in today's terms. Making an additional 12k payment toward principal or submitting advance payments in the order of 12k. 2043 inflation estimates seem pretty irrelevant.
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Jun 20, 2013 20:46
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BossRighteous posted:Making additional payments directly toward principal guarantees you will not pay as much in interest over the loan term.
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Jun 20, 2013 20:56
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moana posted:But if your interest rate is super low (which most are right now), the decision is much less cut and dry. Especially if your choice is between paying down principal and investing in something else. I agree, but I think the original question's conditions are getting overlooked. No intention to derail. root of all eval fucked around with this message at 21:11 on Jun 20, 2013 |
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Jun 20, 2013 21:05
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BossRighteous posted:I suppose I don't understand how inflation works. The idea is that if your interest rate is close to the inflation rate (which many recent ones are), the money you save by paying early is exactly the same in terms of real buying power as the money you pay, so you've come out essentially neutral but with less cash on hand. This is particularly important if you have a low emergency fund or are getting strong return on investments. His Divine Shadow posted:Looks like we where not able to afford the big house. Too bad, so sad. The small house we got a much better offer than we expected though. Now all we need todo is get a loan. Talked to the bank today and apparently they can only finance us 80-90% of the way there due to new regulations. Our first loan (with our parents standing in for security) was 100% and I had figured this one would be too, but times change. At least we can swing the missing 10-20% ourselves more or less. Yeah, 100% loans are exactly what caused the whole mortgage fiasco in the first place (and an incredibly dumb idea) so they are not allowed to do that anymore. You can occasionally get 95, but 90 is more likely.
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Jun 20, 2013 22:02
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FHA purchase does 96.5% FHA foreclosure purchase does 99.9% (100 dollars down) USDA purchase does 100% VA purchase does 100%. Homepath purchase does 97% Conventional purchase does 95%. You don't need to always put down 10% when buying a home to live in.
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Jun 21, 2013 16:21
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life is killing me posted:I am not from CA, but do you have a realtor or are you selling it yourself? If you have unilateral contracts in CA then you can't back out without defaulting on the contracts and you would open yourself up to a lawsuit if the buyers wished. Or you could try mutual rescission and see if the buyers are willing to let you back out once you explain your situation to them. Circumstances change in life all the time and I am sure they understand that. In the end, not knowing about the contract forms in your state and the laws governing real estate there, all I can offer is possible outcomes to your situation. We have a realtor. I figure worst case scenario we can just ask them mutually back out. Thanks for the info.
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Jun 21, 2013 16:30
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Randomly posted:FHA purchase does 96.5% You're right, I'm referring to Conventional. And you can in theory get a conventional loan at 95%, but they've become increasingly unusual/unlikely. 10% seems to be much more common.
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Jun 21, 2013 16:54
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Robo-Pope posted:You're right, I'm referring to Conventional. And you can in theory get a conventional loan at 95%, but they've become increasingly unusual/unlikely. 10% seems to be much more common. I was able to pull it off at 95% with my credit union. An independent broker and Chase were also eager for my business, so I don't think it's as rare as you think. I think what have pretty much disappeared are the 80/15/5 loans, or piggyback loans. VVVVVV: Oops, nevermind. ETB fucked around with this message at 17:13 on Jun 21, 2013 |
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Jun 21, 2013 17:01
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His Divine Shadow is in Finland, so none of the US loan products available is really relevant to him.
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Jun 21, 2013 17:12
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Okay, I need some help. I'm 26, currently living with my parents, about 30 miles away from my job (in Albany NY). I have about 12k in the bank, and, after the furlough, I make 16k per year. I'd hate to do it, but I might be able to go to family to boost it up to a 20% down payment. I want to get a place in the city to eliminate my commute (and get rid of the car), to be able to socialize, and to make attending University easier. I will be in the area for at least two years to finish my degree. After that...I don't know. Should I rent, or should I buy? I've been poking around Zillow, and there's a couple 3+ bedroom places (that are unfortunately 50+ years old) for around $100k, that I was thinking I could rent or. One of my coworkers is offering a 1 bedroom for $650. And my parents are considering eventually selling their place to move into the city, so there's that. What makes financial sense? I get the feeling the answer is "don't buy", but I'm completely unsure about this.
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Jun 21, 2013 21:38
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