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You have it right by my understanding as well. If the seller owes 100k and you offer 75k, the bank would take the whole 75k and write off 25k. Unless their counter is over 100k (taking them out of a short sale) the actual number wouldn't matter to the seller at all. Our agent told us to expect any short-sale offer to be accepted quickly by the seller, but then for a long wait before the bank made any decisions or counters.
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Nov 8, 2013 19:08
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If the seller is fairly certain the lender will reject the offer, then might the seller reject the offer up front? Otherwise, everybody has to wait forever for the lender. And it might preclude the seller from entertaining other offers.
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Nov 8, 2013 19:13
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I hope in that case our comparison of recent sales and the listing agent will help him decide to accept the offer and let the bank appraise it. The listing agent actually thought it was a fair offer so hopefully that works. We also found that the lender is BoA and this was originally a countrywide loan. I'm not familiar with the details but our agent thinks that BoA will try to process it quickly due to the whole BoA is liable for countrywide fraud thing. Has anyone here had any experience with this particular situation? I don't want to have to wait 3 months to find out this isn't going to happen when there is other houses we can buy during that time. This is the first house we've actually liked in 6+ weeks of looking, its in seemingly good shape and we want to close sooner rather than later.
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Nov 8, 2013 20:46
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DemonLlama posted:The financial incentive for agents is to make a quick sale and get to the next one. They don't really care if the sale is 10% higher, they want to get their money and get paid for working with you in as short a time and with as little effort as possible. Given that we know I have a bad agent, it makes sense in retrospect to limit how much the agent knows of my financial position. Unfortunately, even if I had that kind of foresight in general, that wouldn't have helped too much for the property I made an offer on - it's owned by a neighborhood revitalization non-profit and they ask for income details on potential buyers. So my agent knows that I make good money and that's probably one reason why she's pressuring me into thinking about offers in terms of list price rather than comparable sale price. But I've told her many times that I'd rather sit and wait in my apartment for the right deal than to overpay on a property just to get one. She was in fact referred to me by a coworker, but maybe my coworker didn't put so much emphasis on price/value and was more concerned about quickly getting out of the house he had just sold. Oh well, live and learn I guess.
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Nov 8, 2013 23:34
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GanjamonII posted:I hope in that case our comparison of recent sales and the listing agent will help him decide to accept the offer and let the bank appraise it. The listing agent actually thought it was a fair offer so hopefully that works. I didn't buy a short sale but I bought a bank owned home 2 years ago from BofA and it was a nightmare. Their escrow company drug their feet on everything and caused us to miss our closing date by nearly 3 weeks and cost us thousands in rent and moving costs as we already sold our old home. BofA can eat the biggest bag of dicks. This was at the tail end of 2011 when they had a huge backlog though so times may be different. BofA took about a 60% loss on that house too.
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Nov 9, 2013 09:27
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GanjamonII posted:We also found that the lender is BoA and this was originally a countrywide loan. I'm not familiar with the details but our agent thinks that BoA will try to process it quickly due to the whole BoA is liable for countrywide fraud thing. Has anyone here had any experience with this particular situation? I don't want to have to wait 3 months to find out this isn't going to happen when there is other houses we can buy during that time. I think the short sale process itself for me once we found a buyer willing to go through with it all was about 4 weeks long... then BofA balked because their appraiser was stupid and claimed that the fair market value was actually 250k when there were literally zero comps available due to a litany of factors. So the buyer backed out and BofA lost more and more money in an attempt to not lose a whole $20k in the end (loan had PMI, so they were going to get some cash out of it - they were trying to make it precisely $0 lost on the books I believe given the back & forth I had with them). The next buyer took about 6 weeks from offer to close I believe - BofA learned their lesson. This was in 2010 when the full gravity of the Countrywide problems weren't recognized. For anyone looking at short sales, if things aren't looking favorable for you and the bank is starting to throw their weight around, walk and go to the next one. It is typically within your right to do so as a provision of short sales that you don't get when buying most non-distressed properties. One of the downsides of looking for distressed property deals on houses is the wait for the right value one, but I think it can be rewarding if you go into it with the right mindset.
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Nov 9, 2013 20:45
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necrobobsledder posted:For anyone looking at short sales, if things aren't looking favorable for you and the bank is starting to throw their weight around, walk and go to the next one. It is typically within your right to do so as a provision of short sales that you don't get when buying most non-distressed properties. One of the downsides of looking for distressed property deals on houses is the wait for the right value one, but I think it can be rewarding if you go into it with the right mindset.
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Nov 10, 2013 04:08
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On Friday I was talking with our broker about when we wanted to lock, and she said there was some financial news that caused rates to rise slightly. Does anyone know what this might have been? And what are some good resources to get current? We are basically just going to pick a day next week, but I want to follow it for my own edification.
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Nov 10, 2013 06:34
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porkface posted:On Friday I was talking with our broker about when we wanted to lock, and she said there was some financial news that caused rates to rise slightly.
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Nov 10, 2013 06:44
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porkface posted:On Friday I was talking with our broker about when we wanted to lock, and she said there was some financial news that caused rates to rise slightly. Rates are at ridiculous historical lows. Since mortgage interest is tax deductible, a 4% rate is essentially an interest free loan for the first few years of your mortgage. And (hopefully) if your wages keep pace with inflation, you'll be paying back a dollar with 80 cents (or less) in about 20 years. If you were to "time" mortgage rates at any time over the past EVER you'd look like a genius for locking in rates at any time in the past 18 months, and probably for the next 18 months. Any daily news is just noise. If you could predict what rates would be next week or next month, you'd be working for PIMCO. Buy the house because you're getting a good price, have the money, want to live there, etc.
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Nov 10, 2013 15:32
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One thing to keep in mind is that if interest rates went up, it would put downward pressure on house prices, which is a Bad Thing according to most of the baby boomer economists more or less. Regardless, the past few years and another year or two from now we'll still probably have interest rates hardly different from today. A percent or two difference on a mortgage shouldn't drive anyone to buy earlier than they're financially ready, and I'm sure we'll maybe go up another percent or two, tops, in the next 18 months. Although for the lifetime of a loan the interest paid tends to dwarf the principal and so the mortgage rate matters significantly, I'd still rather just have a cheaper house in the end with lower maintenance costs over a more expensive one. adorai posted:Keep in mind that a short sale has a serious advantage over a straight foreclosure -- the seller is trying to preserve as much of their credit as they can, and part of that is maintaining the property until it sells. They will do a much better job of making sure the basement doesn't flood, that any leaks in the roof are addressed, etc.. than a bank agent watching a vacant home will.
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Nov 10, 2013 17:50
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The guy building his 4th or 5th house may not have to worry about his FICO score, but if it goes into foreclosure then you can bet the banks will be taking him to court to get their money back. One of the downsides of being rich is that people are much more likely to sue you, since they know you can pay a big judgement.
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Nov 11, 2013 00:48
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Non-recourse states mean that the bank cannot sue you for the residual balance when you have a short sale / foreclosure. This works for everyone rich and poor (typically better for the poor since they foreclose much more often). Also, let's not forget that the .1% have lawyers and can probably draft up a loan that puts them at the advantage.
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Nov 11, 2013 02:56
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tiananman posted:Rates are at ridiculous historical lows. Since mortgage interest is tax deductible, a 4% rate is essentially an interest free loan for the first few years of your mortgage. This is only true if, without having a mortgage, you would have itemized anyway because your other itemized deductions already exceeded the standard deduction. If you normally would have taken the standard deduction, then the amount you deduct for mortgage interest up to the amount of the standard deduction isn't actually savings at all.
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Nov 11, 2013 23:19
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tiananman posted:Since mortgage interest is tax deductible, a 4% rate is essentially an interest free loan for the first few years of your mortgage.
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Nov 11, 2013 23:40
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I'm glad you guys pointed that out, because "the interest is tax deductible (therefore you get it back)!" is the second biggest piece of false logic/industry misinformation after "you're throwing away money on rent!" It's right up there with "I don't want a raise because I'll take home less money in the next tax bracket". Before you can do the math, you must first understand the math.
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Nov 14, 2013 22:55
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Is there any reason not to buy in cash, and if not how much leverage is that in price negotiation?
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Nov 14, 2013 23:07
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If a seller receives an all-cash offer of an acceptable amount, they are very likely going to take it over a non-cash offer unless the non-cash offer is substantially higher. Closing on an all-cash offer is WAY simpler and tends to be a lot faster. A coworker of mine just sold his house and received a competitive all-cash offer and basically ignored all the other offers in favor of it. His deal closed in less than 2 weeks with pretty much zero headache. It sucks for the rest of us buyers that can't afford to offer all cash, but that's the market. Guinness fucked around with this message at 23:13 on Nov 14, 2013 |
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Nov 14, 2013 23:10
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Stultus Maximus posted:Is there any reason not to buy in cash, and if not how much leverage is that in price negotiation? The reason not to buy in cash would be that you prefer having highly liquid assets (cash accounts) vs. real property ownership. For the person who has enough cash to buy a house and still have plenty of liquid assets there's probably not a compelling reason to get a mortgage...unless your one of those max/min opportunity cost types who like to compare your mortgage interest rate to potential investment profit. For example, if you had a surefire investment that could make you 8% annual return then you'd be silly not to take a 4% loan and use that money to invest in your sure thing. However, there are no sure things PLUS capital gains tax will turn your 8% into 5% anyway.
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Nov 14, 2013 23:28
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Guinness posted:If a seller receives an all-cash offer of an acceptable amount, they are very likely going to take it over a non-cash offer unless the non-cash offer is substantially higher. Closing on an all-cash offer is WAY simpler and tends to be a lot faster. Awesome. This place has been listed for 6 months so I won't worry too much about a (relatively) lowball cash offer being refused in favor of someone else's loan offer. e: and I'm not rich uncle pennybags, I just had a big down payment saved up for a dream house which I think I'll turn into an outright buy of a more modest home.
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Nov 14, 2013 23:48
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Spamtron7000 posted:However, there are no sure things PLUS capital gains tax will turn your 8% into 5% anyway. How?
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Nov 14, 2013 23:48
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Rurutia posted:How? Sorry I meant 6% not 5%. Top income bracket pays 20% capital gains plus the new 3.8% punch in the gut tax.
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Nov 15, 2013 00:02
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Stultus Maximus posted:e: and I'm not rich uncle pennybags, I just had a big down payment saved up for a dream house which I think I'll turn into an outright buy of a more modest home. I hope to be able to do that someday. No mortgage with half of it going to interest, smaller home = smaller bills, etc. You'll be so much better off financially in a lot of ways.
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Nov 15, 2013 00:33
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Stultus Maximus posted:Awesome. This place has been listed for 6 months so I won't worry too much about a (relatively) lowball cash offer being refused in favor of someone else's loan offer. Be really really careful about a property that has sat unsold for six months. That is usually a huge warning sign; either it's severely overpriced and the sellers refuse to budge (in which case, you should discount from the list price, and then discount again for your all-cash offer) or it's distressed in some not-necessarily-obvious way... which leads back to the former, really.
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Nov 15, 2013 01:34
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razz posted:I hope to be able to do that someday. No mortgage with half of it going to interest, smaller home = smaller bills, etc. You'll be so much better off financially in a lot of ways. Yeah... it's just such a hard decision. Charming 1000 ft2 Arts & Crafts bungalow bought outright or half a beautiful brick 1904 2200 ft2 town house. I don't really need the space but I'm such a sucker for historic architecture and the dark wood interior trim. Leperflesh posted:Be really really careful about a property that has sat unsold for six months. That is usually a huge warning sign; either it's severely overpriced and the sellers refuse to budge (in which case, you should discount from the list price, and then discount again for your all-cash offer) or it's distressed in some not-necessarily-obvious way... which leads back to the former, really. I've got a good inspector to take a look before I make rash decisions.
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Nov 15, 2013 04:41
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I had a cash buyer on my last house and it was amazing. I didn't even try to haggle on price and I fixed every loving thing they wanted fixed no questions AND moved out in 2 weeks. Had to live in a hotel for 2 weeks but I didn't care. We signed maybe 8 pieces of paper at closing and that was it, maybe 15 minutes.
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Nov 15, 2013 19:14
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Ok so I need to pick a lender Theres three options right now: Mortgage broker (friend of a friend) - 4.25%, 1% origination fee. zero points Work credit union - 4.25%, 895$ fee, no points Online lender (from zillow) - 4.125%, a lender credit which covers their fee and also a few hundred dollars of closing costs. Other large lender - 4.3% w/ 2 pts or 4.5 without (not considering this one). The mortgage broker is the one I'd prefer to go with because it seems like he would arrange everything for us, guide us through the process and so on. The 1% origination fee though is a little concerning since its $2,800 so about 2k more than my credit union for the same rate. I don't know if the 2800$ is a 'good deal' for what they do. Its also a friend of a friend and so far he's helped us out with preapproval letters and so on, and been really responsive and helpful. The online lender I am unsure about, but they seem to have positive reviews on zillow.com and by far the cheapest. Also has been quite responsive and helpful. Is it worth paying extra for the mortgage broker?
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Nov 15, 2013 19:30
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GanjamonII posted:Ok so I need to pick a lender When are you closing? The broker can, in theory, get you the best rate on the specific date that you lock in your rate. My broker said that many banks changed their listings twice a day. However, the fact your broker is quoting you something worse than your online quote is concerning. Did you get all these quotes on the same day? I would not bother with the large lender and maybe not the credit union either. Keep in mind there's a pretty good possibility that some bank will buy your loan immediately, so whatever bank you go through is not necessarily going to be the bank that services your loan. For me, this eliminates the "customer service" side of the picking-a-lender equation.
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Nov 15, 2013 21:18
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The broker friend of a friend is probably making a point on the front (origination fee) and looking at today's wholesale rates, another point to point and a half on the back end, which is about right with my experience with mortgage brokers. 2.5 to 3% is probably most brokers target gross revenue on a deal.
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Nov 15, 2013 21:53
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GanjamonII posted:Ok so I need to pick a lender I would not pay extra for the mortgage broker. Go with the online lender, or try to get the work credit union to match - I got a quote for 4.25 with -1 point (1840 to me at closing) and one for 4.3 with 0.5 points from the lender associated with my real estate agent, and when I asked them to match the other deal they did. All the ease of dealing with a local, known lender, with the feel good price of online!
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Nov 15, 2013 22:23
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GanjamonII posted:Ok so I need to pick a lender Have you tried haggling with the broker yet?
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Nov 17, 2013 22:31
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Wait, is the Origination Fee a fee paid directly to the broker? Do brokers charge for their services in the US?!?
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Nov 17, 2013 22:47
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Yes, mortgage brokers charge for their services in the US. It's a terrible business since the commissions can be very large and almost no education is needed to be a broker.
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Nov 17, 2013 22:55
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Kind of a tangential question about appliances - I can't think of anyplace else to ask, though. I'm in a situation where I need to buy a washer, dryer, and fridge for the place I'm moving into. It has the hookups for washer/dryer, and a large space for the fridge. Should I buy new or refurbished? I've heard that energy efficient washer/dryers will save me money over time, but I've also heard they don't wash clothes as well. And new fridges are really expensive, but I don't want to deal with a broken fridge - plus there's going to be 4-5 people living in this house, so it needs to be a large one, since I want to avoid buying a second fridge. Any input? I figure some of the homeowners in this thread have had some experiences with appliances and can point me in the right direction.
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Nov 18, 2013 01:02
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Rotten Red Rod posted:Kind of a tangential question about appliances - I can't think of anyplace else to ask, though. My HE washer has options that let it get truly soiled clothes cleaner, while the defaults are pretty good for my office clothes. The dryer does not fully dry things, but it works well enough. I just hang up the very lightly damp clothes from the dryer before bed, and they are always dry by morning anyway.
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Nov 18, 2013 01:37
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I would stay out of the big box retail stores for appliances. There's no need to spend 1500+ on a washer dryer set or 2700 dollars on a new fridge. Look around your area for appliance discount stores or scratch n' dent places. When we bought our house I paid about 900 dollars for a set of Frigidaire front load washer/dryers and around 850 for a french door Whirlpool Gold fridge from an appliance discount place. All 3 items were brand new perfect in the box. If you get top load washers, find a used place to grab them if you want to save some money. The front loaders are much more energy efficient, especially when it comes to water usage, and I wanted them so we could stack them in our laundry room and put the cat's litter boxes where the dryer would normally go. There's not much difference these days between brands, there's only like 3 OEM's that make the things anyway.
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Nov 18, 2013 04:13
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Black Friday is just around the corner. Buy your washer and dryer from Lowes or Home Depot or Sears, he'll anywhere but buy it on Black Friday. All the major retailers probably already have their listings online.
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Nov 18, 2013 05:07
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Rotten Red Rod posted:Kind of a tangential question about appliances - I can't think of anyplace else to ask, though. I just bought some appliances after I bought my first house. Here is how I went about it. You can buy 10% off coupons from the big box improvement stores from ebay, they are usually good for about a month after you buy them. The listing usually has the expiration date. You will also probably get some from your moving packet from USPS but if the code actually works or not is hit or miss. Wait until any holiday weekend and they will also have 10% off major appliances for that weekend with free delivery. There will be models online that are not available in the stores and also cheaper than the models available in the local stores. Now you have 20% off, combine that with buying energy efficient and getting state rebates (I got 50$ for both my fridge and washer) and I spent less than $1000 total for an energy efficient fridge and washer delivered to my door. Make sure you check your state rebates to make sure the models you buy will get you a rebate.
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Nov 18, 2013 05:11
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Yeah, I'm kinda surprised there isn't an appliances megathread or anything. I'm in the process of buying a place where the current owners are taking all the appliances with them, so I've been trying to figure out this strange world of home appliances. I've been making do (with whatever came with the rental) for so long that it just seems like there's too many options. Are Wolf ranges better than my child receiving an education, and what the gently caress is sabbath mode? Do Fagor and Smeg have performance that backs up their memorable names? It would certainly be appreciated if someone knows enough to start a megathread of sorts.
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Nov 18, 2013 06:45
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Broker fees are negotiable. Finding a good broker can save you money, but some of the cheapest mortgages and best terms can be had through a local bank or credit union directly. Shop around. Same with appliances. Slickdeals always has the best scams, err deals listed. I assume Sabbath mode plays war pigs when your oven timer goes off.
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Nov 18, 2013 15:31
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