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Koala Food posted:Third house we lost to a higher bid, despite offering 10k over with no contingencies. I'm so tired of docusign.
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Jan 13, 2021 15:01
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In our area the earnest money deposit was closer to 10%, and the sellers agent would still bristle at getting less than 15% Shouldn't really matter, that money goes to the seller anyways, and you get it back if you have sane contingencies like inspection, appraisal, and financing
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Jan 13, 2021 17:55
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Our Earnest money was around 2%. Northern Virginia. 10-15% just seems so absurd, but I'm guessing it's where folks are more likely to be going in with 20% down, if not full cash?
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Jan 13, 2021 18:24
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Koala Food posted:Third house we lost to a higher bid, despite offering 10k over with no contingencies. I'm so tired of docusign. We got the line that more earnest money = more serious. For our purchase in December we put up about 5%. You do still have to weigh how devastating a hit it would be to lose the earnest money. It's unlikely that a seller is just going to try and walk if your lender misses a deadline, for example, but it's not impossible. I was pretty thoroughly puckered when my lender couldn't get their appraiser in on time, at least until the seller signed an extension. But we also waived all but a modified appraisal contingency.
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Jan 13, 2021 19:35
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In Austin where the market is complete insanity the earnest standard is still 1%
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Jan 13, 2021 19:50
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If you drag out the purchase for 90-120 days I can see the seller taking you EMD and putting it back on the market. If your contract says 30 day close and you're at day 32 and your agent can't forward an email from the lender saying "we're working on it" to keep your deal going you picked the wrong agent Our deal went 30 days over but our agent was in contact with our lender and the sellers agent showing them that progress was happening and we finally closed after about 60 days, largely due to covid things Maybe if you accidentally ran over the sellers dog, they might come after your EMD out of spite, but I've not heard anyone in this thread lose their emd for standard deal speed bumps (and there's a lot of speed bumps) Hadlock fucked around with this message at 19:58 on Jan 13, 2021 |
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Jan 13, 2021 19:55
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Motronic posted:... standards vary ... depending on the lender, the reviewer's mood/suspicion, the size of the deal, the amount of your down payment, your credit score, your documented assets........ I keep thinking about this post and how incredibly accurate it is
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Jan 13, 2021 20:24
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Infinotize posted:I keep thinking about this post and how incredibly accurate it is It's true, all of it.
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Jan 13, 2021 21:11
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Motronic posted:No such documentation exists (in an accurate form) for several reasons, not the least of which is that the person you are talking to isn't the one who is evaluating the deal. Underwriting standards vary from lender to lender and more or fewer docs will be requested depending on the lender, the reviewer's mood/suspicion, the size of the deal, the amount of your down payment, your credit score, your documented assets........ OP please put this in the first post
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Jan 13, 2021 22:44
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Earnest money chat, Seattle: Our realtor told us 3-5% of our max price based on the escalation clause to show you are serious. If I were selling this place and someone offered under 10k earnest, I’d think they had finance issues if they can’t have some of their deposit unavailable for a few weeks.
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Jan 14, 2021 00:18
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Hawkeye posted:Earnest money chat, Seattle: Our realtor told us 3-5% of our max price based on the escalation clause to show you are serious. How often is it that someone puts down like, 5% of earnest money only to not get their mortgage approved? I mean losing 20 grand plus because some underwriter didn't like how much you made the last year and declines your loan would suck lol
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Jan 14, 2021 01:40
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Nice and hot piss posted:How often is it that someone puts down like, 5% of earnest money only to not get their mortgage approved? I mean losing 20 grand plus because some underwriter didn't like how much you made the last year and declines your loan would suck lol That would fall under your financing contingency; you'd get it back (unless you waived it, which would be... dumb).
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Jan 14, 2021 01:55
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3%, no contingency.
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Jan 14, 2021 02:27
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ntan1 posted:3%, no contingency. I think the proper syntax is "No Contingencies, 3% only, Final Offer."
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Jan 14, 2021 03:24
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Yond Cassius posted:I think the proper syntax is "No Contingencies, 3% only, Final Offer." "No. Money down!"
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Jan 14, 2021 03:28
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My realtor was sort of perplexed that I wasn't willing to waive contingencies. She was like "but it's the bay area, you HAVE to," and I was like "Nope, it's the bay area during a pandemic where people are losing their jobs and missing mortgage payments. I'll keep my contingencies, thanks." I only agreed to waive my inspection contingency on my current place after the seller produced a previous offer's inspection report from a month earlier (because that's close enough that I was fine with it). They still got all the other financing / disclosure contingencies, plus I gave them an acceptance deadline on the offer in exchange for 24-hr earnest money. "I can have the earnest money to you literally EOB within one day of accepting my offer. You get one day to accept or reject." Maybe I gave them 2 days? I think it was just one, though. Got my condo, they got out, and now I 
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Jan 14, 2021 03:43
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Sundae posted:My realtor was sort of perplexed that I wasn't willing to waive contingencies. She was like "but it's the bay area, you HAVE to," and I was like "Nope, it's the bay area during a pandemic where people are losing their jobs and missing mortgage payments. I'll keep my contingencies, thanks." This is the difference between feeling like buying a home/getting a mortgage is a privilege you barely deserve and must grovel to all the service providers involved (as most people do) and what it actually is: I'm the customer, we'll do this my way (within reason).
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Jan 14, 2021 04:38
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Interesting point you have there because my wife and I frequently bristled early on in our process because of that vibe. After a couple rounds we got to a good point and our mortgage provider was actually very competent so it ended well.
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Jan 14, 2021 17:01
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The unfortunate truth about not waiving contingencies on a desirable single family home in a red-hot market like the Bay Area is that pretty much means you're not going to get it, or you'll have to pay more to do so. Realtors are advising you to do that because the seller will get multiple above-asking offers with all/most contingencies waived. It's not like a "my way or the highway" thing. Source: this happened to me 6 times.
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Jan 14, 2021 18:11
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dy. posted:The unfortunate truth about not waiving contingencies on a desirable single family home in a red-hot market like the Bay Area is that pretty much means you're not going to get it, or you'll have to pay more to do so. Realtors are advising you to do that because the seller will get multiple above-asking offers with all/most contingencies waived. It's not like a "my way or the highway" thing. As has been discussed in this thread and as I've found with friends in the bay area: that depends on the house. There are only so many A list properties and those are the ones you're talking about. It's the minority of properties available, but you and others describe it as if "that's just bay areal real estate, full stop" and it's not the case at all.
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Jan 14, 2021 18:22
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dy. posted:The unfortunate truth about not waiving contingencies on a desirable single family home in a red-hot market like the Bay Area is that pretty much means you're not going to get it, or you'll have to pay more to do so. Realtors are advising you to do that because the seller will get multiple above-asking offers with all/most contingencies waived. It's not like a "my way or the highway" thing.  I have a condo now, on terms I liked, in the bay area. Anecdotal N=1 and all, but I did it my way with only one offer. (But seriously - at any time other than a pandemic, I'd 100% agree with you. The market just wasn't as hot at the start of the pandemic, briefly.)
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Jan 14, 2021 18:23
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Motronic posted:As has been discussed in this thread and as I've found with friends in the bay area: that depends on the house. There are only so many A list properties and those are the ones you're talking about. It's the minority of properties available, but you and others describe it as if "that's just bay areal real estate, full stop" and it's not the case at all. Obviously a realtor's incentives are more about winning the deal than making sure it is a good financial decision for you, so they're always going to push you towards a riskier bid that will more likely win the deal and get them paid faster and with less work. But also, sometimes you do need to do that to get the property you want.
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Jan 14, 2021 18:32
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Also at a certain price in the SFBA, it just ends up being worth it to fix the issues the previous owner left (thereby mitigating the inspection contingency).
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Jan 14, 2021 19:03
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ntan1 posted:Also at a certain price in the SFBA, it just ends up being worth it to fix the issues the previous owner left (thereby mitigating the inspection contingency). There was one really cool older house that we lost out on that needed a lot of work and sat on a hill held up by a retaining wall. The seller's inspection report noted that the retaining wall was in danger of failing and should be looked at by a specialist. We lost because we put in an inspection contingency to get that issue examined further (this kind of work can run into six figures), and we know that the winning bid had zero contingencies. The winner was either a real dummy or an expert in retaining walls, my guess is the former.
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Jan 14, 2021 19:58
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Likely real dumb. But from a sellers perspective, besides cheating the heck out of the buyer, the other reason they would want inspection contingencies waved in the SFBA is that there has been a pattern of buyers using the inspection contingency as a crazy negotiation tactic to try to screw the seller over. Eventually the law of tragedy of the commons followed and now the money that you would lose from having somebody maliciously use a inspection contingency is factored into the bid price. YMMV obviously, but when a house costs $2.0m, most even larger maintenance tasks (ie, even things like plumbing the sewer lateral on the street, full electrical replacement, structural changes) are going to be a max of $15k and can be amortized into the cost of buying. The exception is going to be something (indeed) like a retaining wall, or house location (ie, below sea level/in a flooding zone/fire risk/susceptible to landslides).
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Jan 14, 2021 20:20
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ntan1 posted:YMMV obviously, but when a house costs $2.0m, most even larger maintenance tasks (ie, even things like plumbing the sewer lateral on the street, full electrical replacement, structural changes) are going to be a max of $15k and can be amortized into the cost of buying. The exception is going to be something (indeed) like a retaining wall, or house location (ie, below sea level/in a flooding zone/fire risk/susceptible to landslides). This is what many people seem to miss about not having an inspection contingency in these looney-toon housing markets. It's pretty silly to worry about 4-figure defects when you're talking about paying millions for a 1700 sq ft house constructed in the 60s. Many of the major (5-figure+) defects are also pretty readily apparent to anyone with even some basic construction knowledge.
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Jan 14, 2021 20:48
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B-Nasty posted:This is what many people seem to miss about not having an inspection contingency in these looney-toon housing markets. It's pretty silly to worry about 4-figure defects when you're talking about paying millions for a 1700 sq ft house constructed in the 60s. Guess what else is looney in those markets? People buying these homes spending so much of their savings and income that they can't afford a $15k problem.
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Jan 14, 2021 20:57
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B-Nasty posted:This is what many people seem to miss about not having an inspection contingency in these looney-toon housing markets. It's pretty silly to worry about 4-figure defects when you're talking about paying millions for a 1700 sq ft house constructed in the 60s. From the seller's perspective, I get that it's particularly dangerous. We could have walked away for literally any reason penalty-free. It would have massively screwed her over because her own purchase was contingent on the sale. It gave us a great deal of negotiating power to adjust the price based on the inspection results. mega dy fucked around with this message at 21:06 on Jan 14, 2021 |
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Jan 14, 2021 21:02
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B-Nasty posted:Many of the major (5-figure+) defects are also pretty readily apparent to anyone with even some basic construction knowledge. I don't doubt there's people who are better at this than me, but I don't think I'm a total dunce and I got nailed (with an inspection...)
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Jan 14, 2021 21:06
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Yeah gonna disagree with the goon that said most inspection issues are readily apparent. I would have to stretch to purchase a used car without a professional inspection -- a residence is gonna be a no from me.
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Jan 14, 2021 21:10
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ntan1 posted:Likely real dumb. I mean, for most if they wanna buy there only option is to stretch and fully deplete savings. To have to drop 15k directly after that is brutal, especially when a $600 inspection could have saved you that 15k in the cost of the house.
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Jan 14, 2021 21:50
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Pilfered Pallbearers posted:a $600 inspection could* have saved you that 15k in the cost of the house. *results may vary. No guarantee expressed or implied. In the event of an error or omission, take a hike sucker
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Jan 14, 2021 22:53
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my inspection easily paid for itself. there weren't even any huge "$15k" sort of issues, just a bunch of minor stuff. but having an inspection gives you a document to club the sellers with in final negotiations, even if it mostly contains issues you already noticed yourself.
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Jan 14, 2021 23:55
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Motronic posted:Guess what else is looney in those markets? People buying these homes spending so much of their savings and income that they can't afford a $15k problem. Indeed. Pilfered Pallbearers posted:I mean, for most if they wanna buy there only option is to stretch and fully deplete savings. To have to drop 15k directly after that is brutal, especially when a $600 inspection could have saved you that 15k in the cost of the house. You're making the assumption that everybody who is buying is doing this. There's definitely a lot of folks doing this but never underestimate how rich people are in the SFBA. pmchem posted:my inspection easily paid for itself. there weren't even any huge "$15k" sort of issues, just a bunch of minor stuff. but having an inspection gives you a document to club the sellers with in final negotiations, even if it mostly contains issues you already noticed yourself. And this is why the tragedy of commons exists. Enough people hated buyers doing this that they stopped accepting offers with the inspection contingency.
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Jan 15, 2021 01:32
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ntan1 posted:You're making the assumption that everybody who is buying is doing this. There's definitely a lot of folks doing this but never underestimate how rich people are in the SFBA. Yeah, this goes back to the poster that literally can't accept that "cash offer" means "I have cash to buy this house" as opposed to some convoluted definition where they are getting a mortgage but not talking about it during the buying process.
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Jan 15, 2021 02:40
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dy. posted:My inspection contingency uncovered ~60k of work. None of it was obvious. Our definitions or level of experience must differ if a home inspector (not a true expert) uncovered 60K of defects. I think waving the inspection contingency is lunacy, but my experience is in a market where 70+% of the purchase price isn't the land itself. I didn't badger any of the sellers I bought from with piddly fixes. If I scale that up to the ultra hot markets, I can see why many buyers care more about getting the (million dollar, fast moving) house than worrying about a couple thousand bucks.
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Jan 15, 2021 02:51
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Hello, idiot in a hot market who waived inspection contingency here. SOP is still to do a pre-inspection. It's not going to uncover all possible problems, but you're still likely to spot most that would cost you five figures.
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Jan 15, 2021 02:55
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B-Nasty posted:I think waving the inspection contingency is lunacy, but my experience is in a market where 70+% of the purchase price isn't the land itself. I didn't badger any of the sellers I bought from with piddly fixes. If I scale that up to the ultra hot markets, I can see why many buyers care more about getting the (million dollar, fast moving) house than worrying about a couple thousand bucks. I think the part you're missing here is that you think the people buying these million + homes in ultra hot markets can actually afford them by traditional sanity metrics like percent of income vs. PITI payment. A lot, if not most, literally can't. They're trying to grab the tail of the dragon so they're not left behind. They may "own" a million+ house but they are hosed if anything goes wrong, and "going wrong" includes "not everything in the same direction" where they can keep getting raises/equity that pays out. It's not everyone.....but it's a lot of them.
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Jan 15, 2021 02:56
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Motronic posted:I think the part you're missing here is that you think the people buying these million + homes in ultra hot markets can actually afford them by traditional sanity metrics like percent of income vs. PITI payment.
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Jan 15, 2021 03:08
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If you're buying a 2 million house and it needs $15,000 in repairs, assuming the economy does not completely crater, at 2% inflation it'll appreciate by $40,000 (- $15,000 = 25,000 appreciation) assuming you can even get the work done in the first year, the way home repair wait lists are going these days. Or just wait for your property tax return the following april ($12,000) and pay the repairs out of that. Unless the roof is caving in, or you have black mold for carpets. There's a weird situation with a house in los gatos (really rich, really white suburb of san jose) I keep stumbling upon, it's ~300,000 for a 2700 sq ft house on a creek, every other house in the neighborhood is $1.5 million or higher, the problem is that it is sitting downhill from a fresh landslide, needs ~$1mm in earthworks/retaining wall, and has less than 8 months left to finish city required rennovations or it loses it's occupancy permit, or something
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Jan 15, 2021 03:57
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