House-buying thread - Why is everyone involved in this process so deeply stupid?

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > House-buying thread - Why is everyone involved in this process so deeply stupid?

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skipdogg: Nov 29, 2004; Resident SRT-4 Expert

Residency Evil posted:

https://www.zillow.com/homedetails/25-S-Elm-St-Denver-CO-80246/13395963_zpid/

God drat it, I need to make more money. Look at that 10 car garage with a lift!

Well hurry up and invent and patent the cure for cancer already

There�s was a local orthopedic doc here that makes incredible money from his patent/invention royalties.

# ? Sep 24, 2021 00:25

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# ? May 31, 2024 17:40

Residency Evil: Jul 28, 2003; 4/5 godo... Schumi

skipdogg posted:

Well hurry up and invent and patent the cure for cancer already

There�s was a local orthopedic doc here that makes incredible money from his patent/invention royalties.

Unfortunately the cabal prevents us from releasing the cure for cancer. Sorry.

# ? Sep 24, 2021 02:09

Hadlock: Nov 9, 2004

Is that the house from heavens gate or big love, I can't tell which

# ? Sep 24, 2021 03:39

m0therfux0r: Oct 11, 2007; me.

Just saw Mr. Cooper mentioned a few times on the previous page- make sure you check your escrow contributions with them. Two friends of mine had their mortgage sold to them and both of them had their mortgage suddenly increase in a way that didn't make sense- it took months of them doing their own calculations and calling back but finally Mr. Cooper relented and admitted that they had hosed up calculating the amount of escrow that they needed.

# ? Sep 24, 2021 21:20

Beef Of Ages: Jan 11, 2003; Your dumb is leaking.

m0therfux0r posted:

Just saw Mr. Cooper mentioned a few times on the previous page- make sure you check your escrow contributions with them. Two friends of mine had their mortgage sold to them and both of them had their mortgage suddenly increase in a way that didn't make sense- it took months of them doing their own calculations and calling back but finally Mr. Cooper relented and admitted that they had hosed up calculating the amount of escrow that they needed.

Impatiently waiting for their notification letter with new account details to resolve that very (potential) issue.

# ? Sep 25, 2021 03:11

he1ixx: Aug 23, 2007; still bad at video games

skipdogg posted:

The housing market is so hosed up right now, it's almost impossible to give any sort of advice right now. Tradesmen are in high demand, supply chain is hosed up making materials either cost 3 times as much as they used to, or just not even be available. This is not a great time to try to build a house right now.

My parents used to build semi-custom and custom homes. They were a small company, maybe did 10 or 12 builds a year and a few remodeling projects. They'd do anything from 130K starter homes to 800K McMansions.

A basic, pre stamped set of plans from a book or architect, slab on grade home with basic finishes could be built in 120 days back in the day. That's with minimal scheduling issues. Things move slower now since everyone is so busy. I live in a 'hood being built by a national builder, and they're running almost 9 months on new construction builds due to scheduling issues. Permits are taking longer, inspections are taking longer, everything is taking longer. They've only got 1 framing crew, there are slabs that have been poured for a month they haven't got the frame on yet. It's nuts.

The best piece of advice I can give you, is the success of your home build will be directly related to how good of a General Contractor you hire. Construction is a relationship business. The right GC knowing who to call, what crews to use, what friendships he can leverage when something goes wrong, and local experience is the most important part of the build.

This can be a shock to people our age who are used to doing everything online, on demand, and generally avoid talking on the phone or dealing with people in person as much as possilbe. You're not likely going to get a framing crew or electrician to give you a bid on your house plans by uploading a PDF to their website. I dropped off many sets of blueprints to job sites or contractors houses when I was a teenager for my parents.

The second is have a ton of money. Whatever you think the house is going to cost, go ahead and add 50% to it, and then have another 15% in reserves just in case. It's really easy in the budgeting process to say "oh yeah 4 dollars a sq for flooring should be plenty" and then you get to the flooring store and nothing but the 7 dollar a sq ft stuff will do. Interior finishes can make a huge difference in costs.

That money also needs to be liquid. Construction loans are available, but you'll need excellent credit and quite a bit of assets to back them up. It's much easier if you can bankroll this yourself. A good relationship with a smaller local bank or credit union can make this a little easier. My parents had a good working relationship with a rural bank in KS that would handle construction loans for their clients when needed. (circling back to the whole relationship thing in the construction industry)

I could write a ton about it all but it's easier to answer specific questions. Buying land is easy. It can be difficult to get utilities to rural land, you have to plan for water/septic, electricity, and you should have a plan in place for extended power outages because you'll be very low on the list of people to get fixed if something goes wrong.

Looking over that vtwoods.life blog about their house building a few things stand out

1) He lists no pricing at all that I can see. He's building a passive Haus in the VT mountains, this is going to be a very expensive house, it sounds like they have the means to build this house though
2) His timeline was off. One of his first posts was something along the lines of "we hope to be moved in by next summer" and he doesn't have kitchen counters yet, and some of the doors don't fit in his house as of mid september.

Hey I just saw this. I took a break from SA for a while but I thought I'd write up a status update and I saw this so here's some info.

Building a house is definitely one of the most stressful things I've ever done and probably much worse during a pandemic. You wrote a TON of good stuff above and I think I'd agree with almost all of it.

Regarding #1, I can list pricing but I'd probably need to be somewhat indirect because I don't know what kind of issues actual prices would open me up to. Our general contractor has been great. He is a unique person in that he prefers fixed bid house builds because it gives him control and predictability and he finds that must home owners prefer that control and predictability as well. He's right about that in our case.

The architect said we'd be able to build this house for $750k. After showing the builder the plans (during the phase where we were interviewing builders), he said there was no way to build it for less than $1m. That isn't including land. Or contingencies. We went to work with the builder and the architect for about four months doing some "value engineering" and finding ways to get the builders price tag down to a price we could live with. We got the price down to about $970k and decided to go for it. It was far more than we wanted to spend but more in line with what we expected based on earlier research. I should mention that this price was a fixed bid price so there was a contract involved and only a few buckets for "allowances" that could grow which limited that whole "keep 30% set aside for contingencies" maxim somewhat less of a worry.

As we went through the process, the costs went up for two reasons. One is that we changed our minds for a few things which required change orders. As far as change orders go, we really didn't do very many. We are up to change order #11. Some are very minor like $250 for a new screen door design or something. Some are expensive like $12k for more topsoil or things that weren't considered until after we saw the house "working" (like drip edges and an extra patio). The change orders brought the price total up to $1.01m total although it might be lower than that because that total is including allowances and some of them weren't hit. That doesn't include the land which was $240k.

We are very lucky in that we do have the means to do this. We will end up with a much smaller bank account that we are OK with but we'll save like crazy to build it back up. The end result (a net-zero house using passivehaus design principles) is pretty close to what we expected with only a week or two left on the build and very few expenses left to pay for. We built the house with liquid cash so there was no financing or banks to mess with. It is fair to say that this project took more project management on my part than I ever did for work and that was just the money juggling and timelines. I still have an eye twitch.

The timeline -- ugh. We were supposed to move in May 2021. The pandemic immediately hosed that date because our team was forced to stop work for a month. When we signed the contract with the builder and started doing the timing for things, the date was moved to July and shortly after that to August 15. I was working under the assumption that August 15 was the real date until it was very clear that wasn't happening but, moving in October 1 isn't such a huge slip compared to many of the other horror stories I've heard recently.

The pandemic shutting down builders was obviously bad but the follow on effects of finding and buying lumber was awful, things like buying siding, metal roofing, solar panels and windows were almost impossible for a while. This added delays because windows that were expected to be delivered in 1 month took 4 months. We had parts for the windows held up due to the loving container ship stuck in the Panama Canal too. We ended up having to ship them again so we could continue working.

We also ran into a massive worker shortage here in Vermont. The biggest delay in finishing the house was the drywall. They could only spare one guy for us. He wasn't fast or great. He took 5 weeks when we were expecting him to take 2 which forced us to push out other subs like painters and electricians and plumbers who then had to juggle our place in line. Things like the counters usually take 1-2 weeks but we were in the queue and they had a 6 week delivery commitment. I think builders and general contractors are now adjusting to this new normal but its a mess out there. We are lucky we started building when we did because delays are much longer now.

Here's a good example -- in August we got a water test. The water came back as "very hard" so we wanted to get on their schedule to install a water softener. The soonest they could fit us in was October 20. I called other places and their times were much farther out. They called me the other day and said there was a change and now we are scheduled for November 29th. This is poo poo you get when you are building a house or just dealing with subcontractors in general. I don't know that there's any way to avoid it but you need to adjust for it as much as you can.

They fixed the doors last week. They all shut perfectly now.

As it is, we are moving in next Friday. Some things might not be done (water softener for sure. maybe some lights which are still shipping (since May!)). We will have almost no furniture because the sofas we ordered all pushed back from end of August to October and November.

Bottom line is that I agree with your thoughts on the housing market. Tradesmen are hard to find and, when you do, the good ones are booked out for months. Supply lines are hosed. Dates mean almost nothing. It's a rough time to build a house.

# ? Sep 25, 2021 13:10

Duck and Cover: Apr 6, 2007

he1ixx posted:

Hey I just saw this. I took a break from SA for a while but I thought I'd write up a status update and I saw this so here's some info.

Building a house is definitely one of the most stressful things I've ever done and probably much worse during a pandemic. You wrote a TON of good stuff above and I think I'd agree with almost all of it.

Regarding #1, I can list pricing but I'd probably need to be somewhat indirect because I don't know what kind of issues actual prices would open me up to. Our general contractor has been great. He is a unique person in that he prefers fixed bid house builds because it gives him control and predictability and he finds that must home owners prefer that control and predictability as well. He's right about that in our case.

The architect said we'd be able to build this house for $750k. After showing the builder the plans (during the phase where we were interviewing builders), he said there was no way to build it for less than $1m. That isn't including land. Or contingencies. We went to work with the builder and the architect for about four months doing some "value engineering" and finding ways to get the builders price tag down to a price we could live with. We got the price down to about $970k and decided to go for it. It was far more than we wanted to spend but more in line with what we expected based on earlier research. I should mention that this price was a fixed bid price so there was a contract involved and only a few buckets for "allowances" that could grow which limited that whole "keep 30% set aside for contingencies" maxim somewhat less of a worry.

As we went through the process, the costs went up for two reasons. One is that we changed our minds for a few things which required change orders. As far as change orders go, we really didn't do very many. We are up to change order #11. Some are very minor like $250 for a new screen door design or something. Some are expensive like $12k for more topsoil or things that weren't considered until after we saw the house "working" (like drip edges and an extra patio). The change orders brought the price total up to $1.01m total although it might be lower than that because that total is including allowances and some of them weren't hit. That doesn't include the land which was $240k.

We are very lucky in that we do have the means to do this. We will end up with a much smaller bank account that we are OK with but we'll save like crazy to build it back up. The end result (a net-zero house using passivehaus design principles) is pretty close to what we expected with only a week or two left on the build and very few expenses left to pay for. We built the house with liquid cash so there was no financing or banks to mess with. It is fair to say that this project took more project management on my part than I ever did for work and that was just the money juggling and timelines. I still have an eye twitch.

The timeline -- ugh. We were supposed to move in May 2021. The pandemic immediately hosed that date because our team was forced to stop work for a month. When we signed the contract with the builder and started doing the timing for things, the date was moved to July and shortly after that to August 15. I was working under the assumption that August 15 was the real date until it was very clear that wasn't happening but, moving in October 1 isn't such a huge slip compared to many of the other horror stories I've heard recently.

The pandemic shutting down builders was obviously bad but the follow on effects of finding and buying lumber was awful, things like buying siding, metal roofing, solar panels and windows were almost impossible for a while. This added delays because windows that were expected to be delivered in 1 month took 4 months. We had parts for the windows held up due to the loving container ship stuck in the Panama Canal too. We ended up having to ship them again so we could continue working.

We also ran into a massive worker shortage here in Vermont. The biggest delay in finishing the house was the drywall. They could only spare one guy for us. He wasn't fast or great. He took 5 weeks when we were expecting him to take 2 which forced us to push out other subs like painters and electricians and plumbers who then had to juggle our place in line. Things like the counters usually take 1-2 weeks but we were in the queue and they had a 6 week delivery commitment. I think builders and general contractors are now adjusting to this new normal but its a mess out there. We are lucky we started building when we did because delays are much longer now.

Here's a good example -- in August we got a water test. The water came back as "very hard" so we wanted to get on their schedule to install a water softener. The soonest they could fit us in was October 20. I called other places and their times were much farther out. They called me the other day and said there was a change and now we are scheduled for November 29th. This is poo poo you get when you are building a house or just dealing with subcontractors in general. I don't know that there's any way to avoid it but you need to adjust for it as much as you can.

They fixed the doors last week. They all shut perfectly now.

As it is, we are moving in next Friday. Some things might not be done (water softener for sure. maybe some lights which are still shipping (since May!)). We will have almost no furniture because the sofas we ordered all pushed back from end of August to October and November.

Bottom line is that I agree with your thoughts on the housing market. Tradesmen are hard to find and, when you do, the good ones are booked out for months. Supply lines are hosed. Dates mean almost nothing. It's a rough time to build a house.

Your blog is great however I couldn't figure out how to get your blog in chronological order which may be worth adding (or making clearer if it's already a thing). Also the archive appears to be down.

Duck and Cover fucked around with this message at 01:48 on Sep 26, 2021

# ? Sep 25, 2021 17:57

skipdogg: Nov 29, 2004; Resident SRT-4 Expert

he1ixx posted:

Hey I just saw this. I took a break from SA for a while but I thought I'd write up a status update and I saw this so here's some info.

Wow, thanks for the update post, glad everything is finishing up and you're moving in soon. The satisfaction of seeing your home being finished must be immense. So happy for you and the family.

I love that you went as energy efficient as possible. Passivhaus design is really interesting, I'd be interested in hearing how your first winter there goes, I bet the house will be very comfortable. My step dad was one of the very first energy star certified builders in KS, so it's something I've always thought was important.

I appreciate you sharing the pricing with us, it helps other people set realistic expectations on what things cost these days.

One follow up question for you, did you ever get your internet access straightened out? Did the fiber/cable get extended to you or did you go with Starlink or a fixed wireless plan?

Edit: I�m not sure if you posted before, but do you have the final numbers on how tight the house is?

skipdogg fucked around with this message at 19:34 on Sep 25, 2021

# ? Sep 25, 2021 19:11

he1ixx: Aug 23, 2007; still bad at video games

Duck and Cover posted:

Your blog is great however I couldn't figure out how to get your blog in chronological order which may be worth adding (or making clearer if it's already I thing). Also the archive appears to be down.

I wrote to the guy who put the site together and asked him about the errors (it's been happening for a couple of days now) and the chronological order. I'd love to go back and read what actually happened again too

I'll post here if he makes any progress.

skipdogg posted:

Wow, thanks for the update post, glad everything is finishing up and you're moving in soon. The satisfaction of seeing your home being finished must be immense. So happy for you and the family.

I love that you went as energy efficient as possible. Passivhaus design is really interesting, I'd be interested in hearing how your first winter there goes, I bet the house will be very comfortable. My step dad was one of the very first energy star certified builders in KS, so it's something I've always thought was important.

I appreciate you sharing the pricing with us, it helps other people set realistic expectations on what things cost these days.

One follow up question for you, did you ever get your internet access straightened out? Did the fiber/cable get extended to you or did you go with Starlink or a fixed wireless plan?

Edit: I�m not sure if you posted before, but do you have the final numbers on how tight the house is?

Thanks for the well-wishes. When we realized we could build a house with the funds we had, our main goal was to do at least net-zero and strive for passivehaus. Getting the certification sounds like an expensive nightmare but we used their principles to a very large extent and the house is VERY tight based on the latest blower door test (it would pass passivehaus blower door numbers but we made way to many penetrations for their liking and we have a fireplace and dryer vent -- bit no-nos in a passivehaus). We hope to have very small energy bills to go with having no mortgage so the house will have very little in the way of carrying costs. Just the eye-watering Vermont taxes.

I hope the pricing does help folks. The price is considerably higher due to the net-zero factor and being in Vermont where materials and labor isn't cheap. The walls are super thick and stuffed with insulation, the entire envelope is air-tight and we tried to use the newest and best materials out there to avoid maintenance and failure headaches down the road. Still, building a house is really goddam expensive regardless.

As far as internet goes, my badgering and letter-writing paid off. Not to the government folks -- they didn't do poo poo -- but to the owner of the local internet and cable TV provider. I ended up writing letters and putting them in mailboxes around our area asking what they had, were they happy, do they have contact numbers etc. I got a lot of calls, made a ton of contacts and met the neighbors which was nice. I actually ended up getting the cell number of the owner of Stowe Cable and called the guy -- I said the friend of a friend gave me the number. He was super nice and told me the plans for our area and that they were planning to go down our street during the early summer. They ended up arriving in June to hook us up with no announcement and little fanfare and I was able to put in the good word to get the fiber (FIBER!) run down the road to neighbors who were hating their life with DSL too so they seemed happy. So we have been running the 95/95 fiber connection all summer and it has been rock solid. My wife has been working at the house when its not too loud there since the internet sucks so bad at our rental.

Update: I found some tightness info in my notes: Efficiency Vermont came out and did the test and they were working with the builder on verification. I think the blower door test was 0.6ACH. That's what I found in my build meeting notes. I'm checking with my builder to see if EV ever mailed him anything. It would be some good information to keep on hand. The last text I had from him on this was prior to the test and he said �This house is insulated with Roxul for R23 and then a layer of R25 polyiso on the outside for R48 walls. Ceiling will be R80 cellulose and our air tightness target is 0.6.� I remember him being stoked there were on target but it'd be nice to see the EV data sheet. I'll post here if I verify the info etc.

Another update: the builder found his email from EV. Here's the quote "Cfm50/SF of thermal envelope = 0.053 cfm50/SF of envelope - this meets current PH requirements"

he1ixx fucked around with this message at 00:55 on Sep 26, 2021

# ? Sep 26, 2021 00:41

Alarbus: Mar 31, 2010

Glad you're almost done but that whole story is Vermont.txt with a side of pandemic. Goddamn. Stowe taxes are up there too. At least you're close to The Alchemist?

# ? Sep 26, 2021 01:54

he1ixx: Aug 23, 2007; still bad at video games

Alarbus posted:

Glad you're almost done but that whole story is Vermont.txt with a side of pandemic. Goddamn. Stowe taxes are up there too. At least you're close to The Alchemist?

The Stowe taxes are really high although we don't know exactly what they'll be yet. My understanding is that they adjust for salary and since we are going down to one salary, that might help. We did calculate a ballpark and have planned for the worst but it is going to be, without adjustments for salary or anything, $18,000-25,000 a year. That's wild but slightly understandable given that it is in Vermont and it is for this expensive house and 14 acres about 2 minutes from town and 20 minutes from skiing. We just buckled up and said it was the price we have to pay for being where we want to be.

Stowe is a strange little town. We have been all over Vermont but no town is like Stowe mainly because it has such a large seasonal tourist population. We were once told "The great thing about Stowe is that its so close to Vermont." I didn't know what they meant at the time but I totally get it now. We originally looked at places like Waitsfield and Morrisville but there was nothing available at the time.

We are about 5 minutes from the Alchemist. Its pretttty great

I was just telling my wife today, when we used to come up here to see progress, we'd buy a case of something to take home since we didn't know when we'd be back. Now we just buy freshie 4-packs and pick them up when we need them.

# ? Sep 26, 2021 02:13

Upgrade: Jun 19, 2021

Financing provisionally approved. Just waiting for some other shoe to drop and gently caress us, but looking like we might close on time... kind of unreal. Appraisal done, termite done, financing seems done... and that's it.

In terms of actually paying, do most people here do wire or check? Our lawyer was originally telling us to wire, but now says get a check because of what is apparently a massive string of wire fraud in the South?

# ? Sep 26, 2021 22:59

gwrtheyrn: Oct 21, 2010; AYYYE DEEEEE DUBBALYOO DA-NYAAAAAH!

Upgrade posted:

In terms of actually paying, do most people here do wire or check? Our lawyer was originally telling us to wire, but now says get a check because of what is apparently a massive string of wire fraud in the South?

I wired earnest money because that was what was in the contract and did a cashiers check for closing. Wire fraud isn't just happening in the south, though really I could have wired closing funds since I already had the wire information and knew it would go to the right place.

# ? Sep 26, 2021 23:13

QuarkJets: Sep 8, 2008

Upgrade posted:

Financing provisionally approved. Just waiting for some other shoe to drop and gently caress us, but looking like we might close on time... kind of unreal. Appraisal done, termite done, financing seems done... and that's it.

In terms of actually paying, do most people here do wire or check? Our lawyer was originally telling us to wire, but now says get a check because of what is apparently a massive string of wire fraud in the South?

Wire, but your lawyer says that check is ok according to the purchase agreement? Be sure they review your closing package with you, so that everyone is on the same page

Wire fraud is relatively easy to avoid imo, just assume that all wire transfer instructions are fraudulent until you verify the information with escrow. Use only contact information that you have already verified as authentic

# ? Sep 26, 2021 23:41

gwrtheyrn: Oct 21, 2010; AYYYE DEEEEE DUBBALYOO DA-NYAAAAAH!

QuarkJets posted:

Wire, but your lawyer says that check is ok according to the purchase agreement? Be sure they review your closing package with you, so that everyone is on the same page

At least in WA, the purchase agreement says nothing about how closing funds are to be delivered, probably because whatever you do needs to be available to release to close, while the earnest money's deadline is only for delivery to escrow, not when funds actually are available to release. Presumably if their lawyer says it's fine, it's fine.

Note that because the funds need to be released to close and you'll probably be delivering it very close to closing, a personal check may not be acceptable for closing funds, while a cashiers check would. Double check this with your lawyer and/or escrow agent if you were planning on just showing up with a checkbook.

# ? Sep 27, 2021 00:02

egyptian rat race: Jul 13, 2007; Lowtax Spine Fund 2019; Ultra Carp

So I made babbys first offer on a house today. My agent had trouble getting ahold of the seller's agent, but we got a showing appointment and liked the place enough to put in what we thought was a competitive offer for the area. A little above asking, contingent on appraisal and inspection negotiations.

The deadline for the review came and went today- crickets. No communication apart from acknowledging receipt of the offer. Finally talked to my agent this evening and she is pissed - turns out the seller agent's contacts all go to "a loving call service", and she hasn't been able to speak to them directly at all, only through emails that take 24hr to turn around. I dunno if we dodged a bullet or what, but my agent assured me it's not normal to get Craigslist-ghosted in this process. Has this happened to anyone else?

# ? Sep 27, 2021 01:39

Upgrade: Jun 19, 2021

gwrtheyrn posted:

At least in WA, the purchase agreement says nothing about how closing funds are to be delivered, probably because whatever you do needs to be available to release to close, while the earnest money's deadline is only for delivery to escrow, not when funds actually are available to release. Presumably if their lawyer says it's fine, it's fine.

Note that because the funds need to be released to close and you'll probably be delivering it very close to closing, a personal check may not be acceptable for closing funds, while a cashiers check would. Double check this with your lawyer and/or escrow agent if you were planning on just showing up with a checkbook.

Yea the agreement says nothing.

Originally the lawyer said wire, but I just spoke with them the other day and they said with the amount of fraud right now, a cashiers check is safer, and either use a personal check to cover the difference (a few hundred, if that, we'll have to see what the final number falls at), or they front the money and I pay them back.

FWIW we paid our earnest money with a personal check, which was fine. But we only did a little more than 1%.

# ? Sep 27, 2021 04:21

twerking on the railroad: Jun 23, 2007; Get on my level

First I've heard of it. Is it a budget real estate agency like Clever or something else?

# ? Sep 27, 2021 04:23

egyptian rat race: Jul 13, 2007; Lowtax Spine Fund 2019; Ultra Carp

Got some more details this morning - the seller is apparently in assisted living and takes quite some time in being able to answer/review offers. We are one of three offers in hand, and they're talking today so we'll see what happens. Maybe health issues are getting in the way of planned deadlines.

It doesn't explain the seller's agent is being unavailable. They're a local outfit but the website shows a team of 15-20 people so I don't know

# ? Sep 27, 2021 15:44

Upgrade: Jun 19, 2021

Follow up questions from the lender: "why does your wife's driver license show a different address? when did you live there?" "four years ago, we just never updated the license

# ? Sep 27, 2021 15:49

PageMaster: Nov 4, 2009

Are mortgage rates based on some national number that can be tracked, or just unique to each company? We are just reaching the point where we can refinance our mortgage, but i'm wondering if there's a way to get a feel for rates without calling 8 companies every day to stay on top of the daily swings.

# ? Sep 28, 2021 02:19

QuarkJets: Sep 8, 2008

Our lender asked for a letter of explanation for their own credit pull, like it had their name on it and everything. "Did you apply for a loan from us? Why???"

# ? Sep 28, 2021 02:30

dox: Mar 4, 2006

Have been lurking and starting the house hunting journey of suffering... so far have lost to four all cash offers. Buying in a ski town certainly amplifies the ridiculousness of the market... for example, this recent listing.

I'm a first time homebuyer and completely green on this whole process, is there any reasonable way (i.e. not waiving inspection) to make an offer with only 20% down attractive against all cash offers? I presume maybe covering any appraisal difference, but not sure if there's just generally going to be no chance.

# ? Sep 28, 2021 02:38

Beef Of Ages: Jan 11, 2003; Your dumb is leaking.

dox posted:

Have been lurking and starting the house hunting journey of suffering... so far have lost to four all cash offers. Buying in a ski town certainly amplifies the ridiculousness of the market... for example, this recent listing.

I'm a first time homebuyer and completely green on this whole process, is there any reasonable way (i.e. not waiving inspection) to make an offer with only 20% down attractive against all cash offers? I presume maybe covering any appraisal difference, but not sure if there's just generally going to be no chance.

Cash is forever and always king. And some people have a shitload more of it than you do. It sucks, but is extremely common.

# ? Sep 28, 2021 02:47

gwrtheyrn: Oct 21, 2010; AYYYE DEEEEE DUBBALYOO DA-NYAAAAAH!

dox posted:

I'm a first time homebuyer and completely green on this whole process, is there any reasonable way (i.e. not waiving inspection) to make an offer with only 20% down attractive against all cash offers? I presume maybe covering any appraisal difference, but not sure if there's just generally going to be no chance.

Offer more money? But really no, depending on your definition of reasonable

# ? Sep 28, 2021 02:49

Upgrade: Jun 19, 2021

dox posted:

Have been lurking and starting the house hunting journey of suffering... so far have lost to four all cash offers. Buying in a ski town certainly amplifies the ridiculousness of the market... for example, this recent listing.

I'm a first time homebuyer and completely green on this whole process, is there any reasonable way (i.e. not waiving inspection) to make an offer with only 20% down attractive against all cash offers? I presume maybe covering any appraisal difference, but not sure if there's just generally going to be no chance.

You will never beat an all cash offer if they're even close in value. Before our current place we lost out to 10 homes due to all cash offers. I'm sure we would've lost our current place if it'd sat on the market through a weekend.

The only levers you have are appraisal, inspection and closing time.

Also our lender let us know whoopsie, they forgot to recalculate property tax, extra $2k due at close. Thanks!

# ? Sep 28, 2021 03:26

therobit: Aug 19, 2008; I've been tryin' to speak with you for a long time

PageMaster posted:

Are mortgage rates based on some national number that can be tracked, or just unique to each company? We are just reaching the point where we can refinance our mortgage, but i'm wondering if there's a way to get a feel for rates without calling 8 companies every day to stay on top of the daily swings.

Because mortgages are packaged together as investments, they track with bond prices. Historically the average homeowner will either sell or refinance within something like 7 years. Mortgage backed securities that are made from loans to prime borrowers are extremely safe, stable investments. So safe they they track to the yield on the 10 year T note plus a small premium for risk. Now, different investors and different geographic areas and different lenders will all affect the price a little and there is no single source for what the right premium is, but it�s a rough guideline.

# ? Sep 28, 2021 04:06

QuarkJets: Sep 8, 2008

dox posted:

Have been lurking and starting the house hunting journey of suffering... so far have lost to four all cash offers. Buying in a ski town certainly amplifies the ridiculousness of the market... for example, this recent listing.

I'm a first time homebuyer and completely green on this whole process, is there any reasonable way (i.e. not waiving inspection) to make an offer with only 20% down attractive against all cash offers? I presume maybe covering any appraisal difference, but not sure if there's just generally going to be no chance.

Some lenders will pre-finance a loan and actually let you submit as a cash buyer; that's about as close as you can get to the real deal. You need excellent credit and you'll be charged a premium for the service

Other lenders can provide a "loan guarantee", which is just a few steps removed from full pre-financing. Normally you provide a pre-approval letter with an offer to show that you're serious, but with these programs you provide a letter that says "Hey Seller, we are so confident that this loan will go through that we'll pay you $X thousand if we can't provide financing by X date" with some pretty minimal conditions. This isn't quite as good as cash but it helps sellers feel like they'll at least get some compensation if things don't work out.

Appraisal gap helps, higher down payment helps, a pre-approval letter helps, a shorter closing period helps. None of this beats cash, but it all helps a little. The best way to beat cash is to actually offer more than the cash offers.

Beyond that, there's all of the unreasonable measures: foregoing contingencies, offering far too much earnest money, releasing earnest money immediately (do not do this)

QuarkJets fucked around with this message at 05:44 on Sep 28, 2021

# ? Sep 28, 2021 05:42

he1ixx: Aug 23, 2007; still bad at video games

QuarkJets posted:

Some lenders will pre-finance a loan and actually let you submit as a cash buyer; that's about as close as you can get to the real deal. You need excellent credit and you'll be charged a premium for the service

Other lenders can provide a "loan guarantee", which is just a few steps removed from full pre-financing. Normally you provide a pre-approval letter with an offer to show that you're serious, but with these programs you provide a letter that says "Hey Seller, we are so confident that this loan will go through that we'll pay you $X thousand if we can't provide financing by X date" with some pretty minimal conditions. This isn't quite as good as cash but it helps sellers feel like they'll at least get some compensation if things don't work out.

Appraisal gap helps, higher down payment helps, a pre-approval letter helps, a shorter closing period helps. None of this beats cash, but it all helps a little. The best way to beat cash is to actually offer more than the cash offers.

Beyond that, there's all of the unreasonable measures: foregoing contingencies, offering far too much earnest money, releasing earnest money immediately (do not do this)

Yes, this, If you can pre-approve with a lender it eliminates most of the risk. More money offered with a pre-appraisal would be pretty tempting for a seller.

When we sold recently we saw this trend among buyers in a hot market where they would add a clause to the offer that they would match every offer and add $5000 up to a specific price. (I think they called it an escalation clause). We were selling our house for $385k and someone offered an escalation clause up to $450k in $5k increments to beat any offer. We got another offer with the same clause which immediately shot the price up to $450k but the second buyer wasn't pre-approved and then didn't get his paperwork in by the deadline so we had to view it as a dead offer. We went with the pre-approved one (but with no competing offer, it went back to the original $385k). It was a wild ride.

# ? Sep 28, 2021 11:49

spwrozek: Sep 4, 2006; Sail when it's windy

^We had escalation on our last offer with another offer that pushed us from $610K to $621K. Sucked to pay more but also got it for $19K less than we were willing to go.

dox posted:

Have been lurking and starting the house hunting journey of suffering... so far have lost to four all cash offers. Buying in a ski town certainly amplifies the ridiculousness of the market... for example, this recent listing.

I'm a first time homebuyer and completely green on this whole process, is there any reasonable way (i.e. not waiving inspection) to make an offer with only 20% down attractive against all cash offers? I presume maybe covering any appraisal difference, but not sure if there's just generally going to be no chance.

I am not a fan of sending a letter with the offer but a local in a mountain town is maybe the one time I would consider it. You will still probably lose out to more money but someone who wants a local who works there to buy their place might give you the nod if it is close. A lot of locals are pretty mad about the investors showing up and everything turning into STRs.

Some other good ideas mentioned but at the end money is going to talk most likely.

There is always moving to Hayden....jokingly serious?

spwrozek fucked around with this message at 15:08 on Sep 28, 2021

# ? Sep 28, 2021 15:02

incogneato: Jun 4, 2007; Zoom! Swish! Bang!

spwrozek posted:

I am not a fan of sending a letter with the offer but a local in a mountain town is maybe the one time I would consider it. You will still probably lose out to more money but someone who wants a local who works there to buy their place might give you the nod if it is close. A lot of locals are pretty mad about the investors showing up and everything turning into STRs.

Some other good ideas mentioned but at the end money is going to talk most likely.

There is always moving to Hayden....jokingly serious?

I'm fairly certain our letter is the reason we actually got our house. After the inspection when we asked for some money for the rotting deck, the seller's agent let slip that the seller chose us over some higher offers.

Granted our letter had the double whammy of local in a city overrun by outside money, and expecting our first kid. I feel no guilt for using it, though. We had been losing to all cash, waived contingency bids far over asking for half a year already--many of which went right back up as rentals.

# ? Sep 28, 2021 15:35

GoGoGadgetChris: Mar 18, 2010; i powder a
granite monument
in a soundless flash

showering the grass
with molten drops of
its gold inlay

sending smoking
chips of stone
skipping into the fog

"Me, my female wife and our biological child want you to know your house is safe in our very, very white hands" is something that appeals to a certain breed of seller

Letters are icky, but also, do what you gotta do to Buy House in these crazy times

# ? Sep 28, 2021 15:41

Dik Hz: Feb 22, 2004; Fun with Science

dox posted:

Have been lurking and starting the house hunting journey of suffering... so far have lost to four all cash offers. Buying in a ski town certainly amplifies the ridiculousness of the market... for example, this recent listing.

I'm a first time homebuyer and completely green on this whole process, is there any reasonable way (i.e. not waiving inspection) to make an offer with only 20% down attractive against all cash offers? I presume maybe covering any appraisal difference, but not sure if there's just generally going to be no chance.

I hate to say it, but you probably gotta go over the top of the cash offers and have cash on hand to cover an appraisal gap.

# ? Sep 28, 2021 15:44

Tristesse: Feb 23, 2006; Chasing the dream.

Chiming in as another buyer who only got the house because we wrote a letter. There was a cash offer for 25k more but we were the only non REIT buyers. I did lie about intending to have children but I'm pretty sure no one's going to sue me for not getting knocked up. The sellers were extremely concerned with the place turning into a rental or Airbnb and "ruining the character of the neighborhood." Being from the south that was screaming racism red flags for me, but no. They loved the fact that my multiracial family was moving in. Some people just have specific hangups and tbh it was a real stroke of luck and act of kindness for us. This market is bananas.

# ? Sep 28, 2021 16:00

Residency Evil: Jul 28, 2003; 4/5 godo... Schumi

GoGoGadgetChris posted:

"Me, my female wife and our biological child want you to know your house is safe in our very, very white hands" is something that appeals to a certain breed of seller

Letters are icky, but also, do what you gotta do to Buy House in these crazy times

apparently our state doesn't allow them.

# ? Sep 28, 2021 16:08

egyptian rat race: Jul 13, 2007; Lowtax Spine Fund 2019; Ultra Carp

The house we put an offer on just changed to "pending" on the MLS. Never heard from the agent about.our offer. A certain person at the seller's agency is the source of a lot of 1-star reviews so maybe we drew the short straw and dodged a bullet.

# ? Sep 28, 2021 17:19

B-Nasty: May 25, 2005

GoGoGadgetChris posted:

"Me, my female wife and our biological child want you to know your house is safe in our very, very white hands" is something that appeals to a certain breed of seller

Letters are icky, but also, do what you gotta do to Buy House in these crazy times

One of those 'Million Dollar Listing' reality shows just had a seller take a 400K lower offer (around 3Mil) for her (ugly-ish) house, because the buyer didn't want to tear it down.

When I sell my house, for 400K, you can piss all over it and light it on fire for all I care. The emotions that people bring to what should be a simple financial transaction is why I'm skeptical that we'll ever be completely rid of real estate agents.

# ? Sep 28, 2021 17:40

Motronic: Nov 6, 2009

B-Nasty posted:

One of those 'Million Dollar Listing' reality shows just had a seller take a 400K lower offer (around 3Mil) for her (ugly-ish) house, because the buyer didn't want to tear it down.

When I sell my house, for 400K, you can piss all over it and light it on fire for all I care. The emotions that people bring to what should be a simple financial transaction is why I'm skeptical that we'll ever be completely rid of real estate agents.

Don't forget that the "everyone" in the thread title includes buyers and sellers.

# ? Sep 28, 2021 18:46

amethystbliss: Jan 17, 2006

Tristesse posted:

They loved the fact that my multiracial family was moving in.

This was the case with us too. It was easy to Google the previous owners and they are not white, are big dog lovers, and the wife had worked in the field of women�s reproductive rights. We definitely used that to our advantage. I used do work similar to the wife so we wrote a letter with one of those cheesy Etsy templates, included a family photo of our multiracial family and our dogs, and dropped a line about our jobs. Not sure if we had the highest offer, but we were told they chose us because of our letter.

My block has a Facebook group and the husband still posts pics of his dog in it like once/week. It�s is very awkward.

# ? Sep 28, 2021 19:24

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# ? May 31, 2024 17:40

SlapActionJackson: Jul 27, 2006

Flat rejected an offer for 6% under list today. We're not even on the MLS yet, I ain't haggling on price yet, buddy.

# ? Sep 28, 2021 19:30

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > House-buying thread - Why is everyone involved in this process so deeply stupid?

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