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In many of the markets that have been consistently appreciating rapidly over the last 4 or 5 years we are starting to see growth rates slow dramatically. In a lot of cases supply and time on the market are ticking up. I don't necessarily think we are headed for a crash, but I can certainly see a period of stagnation happening over the next 5 or 10 years. Of course, I am just a dumb real estate lending guy so my predictions shouldn't carry any weight with you, but when I see banks instituting LTV caps and additional reserve requirements in places like Colorado and Washington, it leads me to believe that those markets may be overvalued. The bay area is its own ball of wax entirely though. It is some crazy poo poo going on there and I would like to see it crash to the ground, but I don't think anyone can accurately predict what is ahead for that market.
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Aug 11, 2018 04:37
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The only thing on that report that really makes my hair stand up are the electrical issues. The faucet thing, yeah, it's stupid, but probably just a simple mistake that takes 5 minutes to fix. It's also not a safety issue unless you're a dumbass that doesn't test the temp of water before jamming their hands in. The pressure release thing is also minor and a classic home inspector 'gotcha'. New codes require the discharge from this valve be directed down to near the floor, and preferably where it can point into a drainpan or other drain. It could be dangerous to be near the WH if this were to go off and blast hot water towards you, but again, $10 in parts from Home Depot and 10 minutes to fix. I'd be way more concerned about things like incorrect flashing installation that leads to water infiltration and eventual rotting of structure. Also, any issues with water/cracks in foundations or grading/drainage issues around the property that the flipper may have concealed. The electrical is probably concerning, however, as it points to the fact that the electrical was done by a non-licensed person. That is, someone who might not realize that junctions have to be in boxes and not hidden in walls.
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Aug 11, 2018 14:51
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B-Nasty posted:The only thing on that report that really makes my hair stand up are the electrical issues. Incorrectly / unstrapped water heaters are a big deal in California. You can't get homeowners insurance without it. It's a really easy job to do right and the fact that they couldn't manage to rub enough brain cells together is similar to the electrical problems. Earthquakes plus big water death bomb in your house is a bad time. (mainly a flooding risk, but it's also a fall over and kill you risk.) them doing it such that it looks correct but isn't is worse than not doing it.
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Aug 11, 2018 18:04
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therobit posted:In many of the markets that have been consistently appreciating rapidly over the last 4 or 5 years we are starting to see growth rates slow dramatically. In a lot of cases supply and time on the market are ticking up. I don't necessarily think we are headed for a crash, but I can certainly see a period of stagnation happening over the next 5 or 10 years. Of course, I am just a dumb real estate lending guy so my predictions shouldn't carry any weight with you, but when I see banks instituting LTV caps and additional reserve requirements in places like Colorado and Washington, it leads me to believe that those markets may be overvalued. Nice to hear your opinion with some data. What is a Days on Market average you are seeing?
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Aug 11, 2018 18:24
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Mandalay posted:Nice to hear your opinion with some data. What is a Days on Market average you are seeing? In Oregon where I am it is in the upper 80s depending on the area based on the data for July. The same graph in December looked less like the upper 70s and lower 80s. It depends on the market. I handle loans so I don't get too deep into the dat,a but rather let the graphs on the conference calls wash over me. If you want to get down to state by state data then https://www.nar.realtor/research-and-statistics/housing-statistics is a good place to start.
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Aug 11, 2018 18:54
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therobit posted:In Oregon where I am it is in the upper 80s depending on the area based on the data for July. The same graph in December looked less like the upper 70s and lower 80s. It depends on the market. I handle loans so I don't get too deep into the dat,a but rather let the graphs on the conference calls wash over me. If you want to get down to state by state data then https://www.nar.realtor/research-and-statistics/housing-statistics is a good place to start. 80 days? Ugh. Just put in an offer contingent on selling our current house and that's a long time for a seller to want to wait.
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Aug 11, 2018 19:23
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sullat posted:80 days? Ugh. Just put in an offer contingent on selling our current house and that's a long time for a seller to want to wait. Which is why, if there are other offers/hot market, a seller would be foolish to accept an offer with that contingency. There's so much that can go wrong during the buyer's sale process that a seller that accepted that contingency could have their property tied up for months only to find out that the whole thing fell apart. From a seller's perspective, they can at least control most of the normal contingency items. For an inspection contingency, just keep your house in good condition, do a pre-inspection, and/or accept giving some money back. For a mortgage contingency, put on your underwriter hat and analyze the buyers pre-approval letter and asset/income disclosure statements. But for a sale contingency, there's very little control. The buyer's house (that they must sell) may be a piece of poo poo or they may be hardnosed on price/repairs, etc. I would prefer an offer of many thousands less that didn't have that contingency over one that did.
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Aug 11, 2018 20:36
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So it goes. Can't raise the scratch for the down payment without it. How com.on is such an arrangement? Anyone but a first time buyer is probably going to want to sell their house as well.
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Aug 12, 2018 00:46
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sullat posted:So it goes. Can't raise the scratch for the down payment without it. How com.on is such an arrangement? Anyone but a first time buyer is probably going to want to sell their house as well. t's a very common ask in my experience. it's also very common as a seller to go "lol no" because what it tells you is: can BARELY afford this house, so barely that the bank won't approve the mortgage along with their other mortgage. Which when you know what banks approve for mortgages it makes you think "yeah, this is the kind of person who won't be able to come up with cash for closing." That's my market. And it's not nearly as hot as the bay area, but take from that as you wish.
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Aug 12, 2018 01:37
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Motronic posted:t's a very common ask in my experience. it's also very common as a seller to go "lol no" because what it tells you is: can BARELY afford this house, so barely that the bank won't approve the mortgage along with their other mortgage. Which when you know what banks approve for mortgages it makes you think "yeah, this is the kind of person who won't be able to come up with cash for closing." It'd seem to me that having the cash for the down payment would be a more common issue than not being able to afford both mortgages. Maybe that's just me being lovely at saving though. I guess you could put 5% or something down and then get rid of the PMI after your previous house sold.
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Aug 12, 2018 02:02
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veiled boner fuel posted:It'd seem to me that having the cash for the down payment would be a more common issue than not being able to afford both mortgages. Maybe that's just me being lovely at saving though. You don't necessarily have any idea how much they have (claim) for a down on a first offer. You're looking at their contingencies. f they are serious about their offer they will provide that offer they will provide that information, as i did (even though there was no sale contingency requested on my side). This is how you compete over other offers that may even be higher than your own. it's simply proving that you're going to follow through on the deal and not waste several months of the seller's time. On the seller side i value that, which is why i know what to do to grease the skids as a buyer.
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Aug 12, 2018 02:17
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If you are in a hot market, you might want to sell your house first and then rent back (if they'll do that) or live in a short stay/your car/etc. until you purchase and close. That way you don't have to contingency your offer. We actually did this sort of the other way around, where our sellers requested a longer closing period so they could buy their new place without having to worry about selling. Fortunately we were able to do that, and it allowed us to beat other offers.
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Aug 12, 2018 02:27
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Ashcans posted:where our sellers requested a longer closing period so they could buy their new place without having to worry about selling. I'm (hopefully) closing a 90+ day deal 2 mondays from now because the sellers were not ready to move (WTF?) and I was not willing to rent back to them.
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Aug 12, 2018 03:33
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Ashcans posted:or live in a short stay/your car/etc. until you purchase and close. I've heard CPS can get a bit weird if you're living in a car with three kids, but it might be worth considering! I'm just hoping the seller is having enough trouble dumping their house that they're willing to consider the offer. They've been on the market for 90 days already.
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Aug 12, 2018 05:48
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Has anyone here done a down payment between 5-10% instead of 20%? We are going to see a house on Monday that I’m pretty excited about. We technically could afford both mortgages and 20% but shoveling our entire life savings into a down payment is scary, we would have very little savings left over. If we could do a smaller down payment, I would feel a lot better. The average days on market for our neighborhood in the last year was 32 days, which really surprised me given it is pretty undesirable. We have some work to do on our house before we can list it, and it would be much easier to finish it if the house was empty. We were thinking of maybe buying, moving, and paying both mortgages while we finish it. If we worked hard we could have it done in a month at most.
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Aug 12, 2018 08:47
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Koivunen posted:Has anyone here done a down payment between 5-10% instead of 20%? We did 10% then killed pmi over the next year. Totally normal. Just make sure you get a rate you like and pay a bit extra for pmi.
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Aug 12, 2018 09:30
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We were looking at doing 15% down but opted to take a 401k loan instead.
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Aug 12, 2018 12:18
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Koivunen posted:Has anyone here done a down payment between 5-10% instead of 20%? We did 0% down, but I wouldn't necessarily follow our path to it.
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Aug 12, 2018 13:42
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We did 10% down, mostly for the same reason - we wanted more cash on hand, especially because houses can require pricey work on short notice. We're going to pay down that balance as soon as possible.
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Aug 12, 2018 14:09
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We did 10% but were able to find a lender that takes care of PMI for us, some program they have for first-time buyers with good credit. We also could have put down a bit more, but wanted to keep at least 6 months of mortgage payments as an emergency fund.
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Aug 12, 2018 14:23
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Nibble posted:We did 10% but were able to find a lender that takes care of PMI for us, some program they have for first-time buyers with good credit. We also could have put down a bit more, but wanted to keep at least 6 months of mortgage payments as an emergency fund. Was it just bank paid PMI? Our lender offered us that but if we'd said yes it would have added .125% to the loan for the life of the loan so we declined because we were planning on getting to 20% LTV within a couple of years and when I based on the assumptions I made for net present value of paying PMI vs. that extra .125% we came out ahead if we got rid of PMI within three years. Which we're currently on track to do. What's the experience people in this thread have had removing PMI? Did you just have to send off a letter requesting removal and that was it? Or did they make you get the house re-appraised and/or jump through hoops to prove that you don't have any other liens against the property?
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Aug 12, 2018 14:58
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We'r bought with 10%-15% down, and I opted for a single premium PMI where I put down a couple grand stil away once to not have to pay it monthly. Away the time we were on only one income, I wasn't making very much, and I knew the extra energy month for mortgage insurance wad going to be a pain, but I also needed a little cash left over for repairs. It worked out fine for us but just don't buy at the top of what YOU think you can afford, let alone your mortgage officer. Also treasury than make a ton of twists to your old place, consider just lowering the price and letting the budget decide what they want to di with it after they buy it. The combination of terrorists that mostly don't actually increase your battle and carrying costs of your current mortgage will quickly add up and may swallow any increased price you have in mind.
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Aug 12, 2018 15:00
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Motronic posted:You don't necessarily have any idea how much they have (claim) for a down on a first offer. You're looking at their contingencies. Sure, I'm just saying "Doesn't have an extra 50-100+ grand in liquid funds" is another (probably more common) explanation than "Can barely afford the mortgage on this house." Both houses I bought while owning another house it would have been the former not the latter, except for one I got a bridge loan from my employer and for the other my newly minted wife is an insane money saver. Koivunen posted:Has anyone here done a down payment between 5-10% instead of 20%? I did 5% down on the first house I ever bought, in 2009. PMI sucks but it sounds like you won't be paying it long term so in your situation it seems like a decent option. Median here is 49 days, prices at an all time high.
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Aug 12, 2018 15:01
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therobit posted:Also treasury than make a ton of twists to your old place, consider just lowering the price and letting the budget decide what they want to di with it after they buy it. The combination of terrorists that mostly don't actually increase your battle This is my favorite post ever.
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Aug 12, 2018 15:03
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Friend just bought a place in Denver with 5% down. they won’t let him take pmi off until year three of the loan and 20% equity minimum but it seems like a good setup for him
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Aug 12, 2018 15:12
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A MIRACLE posted:Friend just bought a place in Denver with 5% down. they won’t let him take pmi off until year three of the loan and 20% equity minimum but it seems like a good setup for him I just bought in Denver in April? May? with 10% down because that’s what I could afford while still bring able to put some work into the place and have a bit of a safety net left. They told me I could take PMI off after a year/as soon as reappraisal plus payments equaled out to 20% equity. I’m not sure I’ll hit that target year, although it already appraised at 25k more than what I offered in the initial loan docs and I’ve put a decent bit of work into it since, I didn’t get as much done as I’d hoped on the bigger projects (new floors, etc.). In any case, I’m hoping to drop PMI sooner than later if possible.
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Aug 12, 2018 15:58
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I bought my first house with a FHA loan and only 3.5% down. Just bought my second home and put nothing down at all. 20% down is a great recommendation but isn’t always feasible.
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Aug 12, 2018 18:47
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skipdogg posted:I bought my first house with a FHA loan and only 3.5% down. Just bought my second home and put nothing down at all. Owning so much on your house you literally can't afford to sell for 5+ years it seems like a fairly risky position to put yourself in.
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Aug 12, 2018 19:00
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Thoguh posted:Which we're currently on track to do. What's the experience people in this thread have had removing PMI? Did you just have to send off a letter requesting removal and that was it? Or did they make you get the house re-appraised and/or jump through hoops to prove that you don't have any other liens against the property? It was just a phone call away. The market we're in holds value so whatever automated model they used said it was OK if we based it on the purchase price. If we wanted to base it on the present value we would have had to pay for an appraisal. We opted to just shovel more money at it to hit 80% LTV based on a lower value number. Got a check in the mail a month later for the few dollars of pmi that they refunded.
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Aug 12, 2018 20:57
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skipdogg posted:I bought my first house with a FHA loan and only 3.5% down. Just bought my second home and put nothing down at all. I guess everyone has a different risk tolerance. We waited to buy until we saved enough money and just rented for a while.
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Aug 12, 2018 21:18
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Feeling a little nervous. Just had an offer accepted and I feel like I'm getting a little out of my comfort zone. Looked at a 3/2 condo today, the layout which I had already seen (and liked) in another unit on the property. I'm very familiar with the area as I grew up & now work very nearby. That first unit I looked at received a cash offer for $165k while I was there viewing it about a month ago. So when another one became available, I figured I should look at it and make an offer toot sweet, with the knowledge my offer would probably be beaten with cash or a higher price. It was listed at 159.9, my agent said there were already 2 offers and asked if I could go up to 160k. I thought that was odd to only increase my offer by a hundred bucks, but sure. Then I was told the seller wants to close by 08/31 and is requesting to stay in the property 3 days after closing. It's an old lady moving out of the condo, and my folks live about a mile away so I'm in no rush to move in, so I said sure, the seller can stay, no problem. My agent received a call shortly thereafter from the seller's agent stating because my offer is through a conventional loan, I am willing to close by 08/31, and am agreeable to the seller staying until 09/03, we can offer at $158k and the seller will probably accept it. I did, and they did. Yay. I'm a little terrified though because while I do have the 20% down payment, I'll probably only have about another $5k available after the down payment until 09/01. I know I'll probably have to use some/all of that for inspection and other assorted closing costs. I will have someone splitting mortgage payments with me, and family nearby if I need anything up to and including borrowing cash for expenses as needed, but I've spent a long time saving and enjoying not worrying about having a good amount of money easily available for emergencies or whatever. I feel like I'll probably be okay, but after spending years saving and also a couple years researching the do's and don'ts of buying, I feel like I committed a few don'ts, and that's scary. Highbrow Slick fucked around with this message at 07:05 on Aug 13, 2018 |
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Aug 13, 2018 06:52
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Having only 5k left for closing costs, inspections, and moving in is really tight. You're closing costs alone are likely to be over 5k.
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Aug 13, 2018 11:35
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Thoguh posted:Was it just bank paid PMI? Our lender offered us that but if we'd said yes it would have added .125% to the loan for the life of the loan so we declined because we were planning on getting to 20% LTV within a couple of years and when I based on the assumptions I made for net present value of paying PMI vs. that extra .125% we came out ahead if we got rid of PMI within three years. It didn't involve any increase in rate for us. I think they're doing it to try and attract customers, in a "if we feel confident enough in your ability to pay this loan we'll just forget about the whole PMI thing" kind of way. Sepist posted:Having only 5k left for closing costs, inspections, and moving in is really tight. You're closing costs alone are likely to be over 5k. We had to bring closer to 10k the day of our closing, not even considering inspections and all that. NY here so maybe it's less elsewhere, I know a lot of that was taxes.
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Aug 13, 2018 13:21
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Put 5% down on an FHA. Refinanced after 3 years after the house appraised for 50% more than our purchase price. PMI free now and feels good.
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Aug 13, 2018 13:31
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Highbrow Slick posted:I'm a little terrified though because while I do have the 20% down payment, I'll probably only have about another $5k available after the down payment until 09/01. I would not bring yourself to $5k cash reserves to buy at 20%. That is a bad idea. Talk to your lenders (plural) about going down to 15% w/ PMI. It shouldn't affect your rate at all, and you can knock off the PMI basically immediately. (Make sure your loan terms check the "No Prepayment Penalty" box and there aren't any other stupid terms. Read every document.) You're in a really short window to close so this is a on-the-phone-today thing, not a email-and-pray thing. Is that $5k PLUS an emergency fund or is that $5k in your bank account?
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Aug 13, 2018 14:55
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5k total, not including retirement savings which I will not be touching. My folks have offered a personal loan of up to 10k at 2.5% if needed, and they have the funds and willingness to help with any type of emergency in the near future while I rebuild my savings. I can also stay with them as long as needed, so moving costs are not immediate. I know that number is still way closer than I ideally want to be. Family support is the primary reason I think I can get it done without too much heartache. I guess my direct deposit hits on 08/31, so I'll actually have closer to 8k available beyond down payment at close of escrow. Highbrow Slick fucked around with this message at 15:18 on Aug 13, 2018 |
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Aug 13, 2018 15:12
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You should get a good faith estimate from the loan officer which would give a realistic estimate of your closing costs, which are probably in the 6k range. If you have family offering help you should be good to go though.
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Aug 13, 2018 15:24
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Highbrow Slick posted:
You need to talk about the second part with your loan officer. There are reserve requirements on top of closing costs. You cannot borrow money for a downpayment on a conventional mortgage, it could be mortgage fraud or more likely they would notice and not give you the mortgage. Look at 15% down payment options, or negative points, or ask the sellers to do 160k plus 2% seller assist. Also shop around for a mortgage even if you have a good rate
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Aug 13, 2018 17:27
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lampey posted:You need to talk about the second part with your loan officer. There are reserve requirements on top of closing costs. You cannot borrow money for a downpayment on a conventional mortgage, it could be mortgage fraud or more likely they would notice and not give you the mortgage. Look at 15% down payment options, or negative points, or ask the sellers to do 160k plus 2% seller assist. Also shop around for a mortgage even if you have a good rate You cannot secretly borrow money. You can openly do it if you fill out the right form and still meet the DTI requirements.
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Aug 13, 2018 17:36
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Sepist posted:You should get a good faith estimate from the loan officer which would give a realistic estimate of your closing costs, which are probably in the 6k range. If you have family offering help you should be good to go though. Bolded part isn't really accurate. A loan from a family member to cover closing costs will tank a mortgage. The bank does not want you beholden to any other lender on that property. Secured or not. Your family can gift you money, but if it's a loan and you call it a gift you've committed a felony.
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Aug 13, 2018 18:50
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