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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necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

Come to think of it, the only people I've ever heard of that had good HOA experiences were not in the major urban areas at all. Places like random suburbs in Texas, Arizona, and Colorado. Namely, labor costs and housing costs in general are much, much cheaper than in the major metropolitan areas along the coasts.

canyoneer posted:

I find there's a sizable overlap between older people who tell you about how buying a house is building equity and people that have almost zero in long term savings.

I think most of these older people are just lucky basically and have little idea how the economic pyramid is stacked typically in their favor over several generations of legislation across the world as protectionism for existing property owners. They're also the same people I've found that seriously think that young people are unilaterally lazy and that they're not working hard enough / too stuck up to find the mountains of opportunities and jobs around their area... in 2009. I'm going to literally quote someone I overheard around here (one of the wealthiest counties in the US) recently "If someone like Zuckerberg can become a billionaire, why can't anyone else in his generation at least become a millionaire working as hard as him?"

Vinny the Shark posted:

It's just that I don't really seem to mind community living as maybe most of the people here, and the houses I've found so far don't really seem appealing.

HOAs are among the most financially binding of agreements that you can make with a group of strangers, and given how poor most people are when it comes to financial matters in this country, you're likely setting yourself up for disaster from the fall-out. It's not all too dissimilar from marriages, hard as it may be to think of that way.

HOAs, like most concepts, sound great, but the devil is in the details as usual and most HOAs are just not managed well to make them any bit of an advantage for its stakeholders. Maybe in another decade or two when HOAs are better regulated and the fall-out of the over-building craze of the recent housing boom has simmered over would I think HOAs on average might be ok to deal with over a long term.

Vinny the Shark posted:

Also, what about that idea I had of renting out the place eventually- totally hairbrained? Does anyone have any success doing this?

If you're going to rent the place out, this is the only way to get ahead on a place with HOA dues - because they're tax deductible as a landlord. Never rely upon tax deductions of any sort (including the depreciation, interest, etc. deductions) to cover as your overhead costs. If you can't rent the place out for at least 3% more than the cost of the mortgage + taxes (some markets are so aggressive that that's the most you can expect in rental real estate for buying a new property like in SF) you can't afford to rent it out without taking some serious risks to your pocket book on top of your tenant(s) wrecking your place.

You have to separate the idea of a place that you live in from a place you rent out pretty quickly so you can approach being a landlord as a business and keep you from going insane. That discussion really doesn't belong in this thread though I believe.

# ¿ Jul 3, 2014 16:18

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# ¿ May 16, 2024 01:28

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

GOOD HOAs will somehow be able to enforce in some manner that owners register that the place is occupied by a renter. BAD (or just lax honestly) HOAs will have no idea how many units are actually owner occupied or by tenants. This matters because communities that have a greater than n% renter occupation rate are not able to get FHA loans anymore for new buyers. The limits depend greatly upon what the HOA decides and can enforce through some measure in the end. An HOA with rental limits doesn't matter if they have no way of enforcing by penalizing owners for not registering and by periodically checking somehow if a unit's occupied by said owner. The HOA I was in had zero idea and while everyone had a gut feeling the renter percentage was about 70%, we couldn't even get any motion through on actions because more than 70% of the owners didn't even live in the country normally in the first place, so nothing happened any which way.

# ¿ Jul 4, 2014 00:49

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

NFCU bros and hoes

I think pretty much everyone that's related at all to a veteran or has been a DoD contractor or as a civilian is open to join. As a result, I think at least 75% of the DC area is eligible to join NFCU.

The real bonus of NFCU for me is that as a credit union everyone likes to work with them. I know my agent was super, super happy to hear that I'm using NFCU as my lender and it was pretty important in making a very strong offer and to avoid a bidding war that'd have cost me a lot more (I suspect the place I got for $250k could have gone for $265k+ in a war).

Aquatic Giraffe posted:

Looked into the NFCU no money down no PMI loan, and the interest rate is 4.625%, and we could get a fixed rate VA loan for 3.125%. I think we'll keep hoarding our dollars for that 20%.

HomeBuyers Choice plan right? The difference for me is that VA loans put some additional restrictions on the loan that are deal-breakers for many sellers (all closing costs aside from down must be paid for by the seller last I remember, for example) and I'm ok with paying a little more. A difference of maybe $80 / mo on a $250k house wasn't worth it for me. My goal of having a house payment < 10% of my gross is totally met any way around all of this, and the sooner I move in, the sooner I start saving as far as I see it. Once the wife gets a job, we should be able to get well under 7% of our gross being put into our housing and the property already rents out at a substantial profit it turns out (and has been for its lifetime).

So yeah, I've offered on a house I barely saw and it was accepted within 3 days of original listing. Turns out this is pretty much how fast you have to go to buy a decent value house in the area now due to such low supply of affordable houses (the rental market is retarded too and renting would make me think I should just stay around DC, sadly). Every place I saw when I was in town fell through so this was a miracle listing for me.

# ¿ Mar 26, 2015 19:06

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

I think on my form wife was able to open an account either through one of her uncles being in the military, working on a military base, or something about me being eligible since my dad's a veteran. It's not like they'll ask for which unit and rank he was in.

# ¿ Mar 27, 2015 14:13

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

For those on the NFCU train or want to get on, I just talked to my loan officer, and what some people said earlier is confirmed, others are debunked (myself included):

* You do not need a 750 credit score for even the HomeBuyers Choice product. You can go in probably at 720 or so and still get it
* There is no point with using HomeBuyers Choice if you have even 5% down
* You do NOT pay PMI on a conventional loan with Navy Federal. It is very similar to a VA loan but imperceptible to the seller (unlike a VA loan which forces the seller to pay full closing costs aside from down of 2.5%, putting them at a disadvantage out of the gate)
* Most loans that people with good credit, income, etc. they have will meet closing dates within 30 days. 45 days that people cite are for more "troublesome" accounts (this is military, service members are not particularly well known for being good with money in this country).

Basically, Navy Federal breaks all the rules of lending in your favor, and every selling agent would rather deal with a credit union than a bank as the lender. This is primarily because Navy Federal does NOT sell these mortgages on the secondary market. The selling agent I talked to this weekend point blank said if two similar offers came in and one was with a credit union as lender and the other as a regular bank, there'd be no contest because the credit union is far less risk and probably closes faster, which saves them substantial amounts of money.

QuarkJets posted:

Jesus, is NFCU really all that and a bag of chips? We're using a local credit union but they basically don't have mortgage services

NFCU has been stupid good for me, I'm kind of amazed at how quickly they get back to me for random questions. Even if they start dragging their feet, it'll get resolved within hours and still have no problem meeting closing. Internally, this probably means they're able to close on a mortgage within a span of less than two weeks, which is commendable if you ask me. They haven't even gotten my signed contract and they say they'll totally make the 23rd for a closing date still. Absurd? We'll see.

# ¿ Mar 31, 2015 21:04

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

skipdogg posted:

The internet seems to think vinegar will cut through the residue left behind, haven't tried it though. Even after you have cleaned and replaced as much as you can, you still might need to bring in an onzone generator or something to help kill the last of it.

I basically incinerated a bowl of curry in my microwave (inputting 9000 thinking it's milliseconds and forgetting to check back means I had a very, very long day) and while it still smells of smoke, I heated up some vinegar in a bowl repeatedly for a couple days and it's a lot better than it used to be. I think the next step is to use some charcoal to absorb residual odors. The vinegar vapor didn't seem to affect the curry staining the inside of the microwave.

Ciaphas posted:

Time for the old rent vs buy question! My lease on my current apartment is coming up December 2015, so I've got a ton of time to work this one out. Gonna post this while I read the OP and related posts, so maybe some of this will be answered along the way. Sorry if it is.

I bought a condo in your situation and pretty much lost in every possible way besides going bankrupt and/or divorced, but it doesn't mean that it'll happen to you. Condos should be purchased as a primary home with one or more of the following criteria in mind:
* intent to rent out eventually or immediately (to take advantage of more tax deductions on the HOA dues that aren't deductible when you live there)
* don't mind paying EXTRA to have someone take care of externalities like lawn, snow removal, roofing, etc.
* inability to find anything in your price range for the foreseeable future (you are somehow unable to save up for a SFH or even townhouse)

In the wrong circumstances, condos can be the worst of renting apartments and the worst of owning a house. In the best circumstances, condos are great to rent out and make decent passive income on long-term or for someone single and not really needing or desiring much space.

When it comes to buying places with HOAs, I wouldn't even look at any of the properties and would first march right into the HOA management office and look through the records as a prospective buyer (if this is withheld from you for any reason whatsoever, immediately give up and leave - this is NEVER a good sign and is about as big of a showstopper IMO as much as a cracked foundation is in a house).

For reference, I'm one of the people that wrote the HOA warning posts quoted in the OP of the thread. I have every reason to hate HOAs with a burning passion, but buying a home for the wrong reasons is probably a bigger factor in utter failure that I had.

If I ever have enough money to just blow on a nice vacation home but am still too cheap to go buy some multi-million dollar villa, I would consider buying a luxury vacation condo and renting it out instead. Otherwise, I'm just going to go to some luxury resort like any other person that has a job and can't go on vacation for literally months at a time throughout the year.

# ¿ Apr 1, 2015 20:33

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

They may reserve the right to go "uh... nope, you need to pay up more, son" depending upon the market honestly. The rates that were on the site weren't what I just got offered

However, for as low of a price I'm paying, .75% difference results in less than $100 / mo for me when the house payment will already be a bit less than 10% of my gross income. If I go nutso, I could pay this house off within a couple years.

psydude posted:

Looking at two places this weekend. Got preapproval from one lender already: 3.25% with no lender fees and a $5000 credit toward closing (30 year fixed VA loan with 0% down). That seems pretty good, any thoughts?

Goddamn, that's pretty good. Even Navy Federal goes down to 3.125% and 3.534% APR with 2 points on it for a VA loan. I thought I was doing swell with $1.4k back at closing from the lender. Negotiating a few grand more from the seller made it better too, but goddamn those VA loans are good for buyers (but not so great for the seller really).

# ¿ Apr 2, 2015 20:33

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

BEHOLD: MY CAPE posted:

If you're paying a 0.75% rate penalty for a "no PMI" loan that's probably worse than just paying PMI

The difference I noted is a VA loan v. conventional, VA loans are heavily subsidized and can be a dealbreaker for many sellers. So if you're a veteran that's the sort of deal you can get for your service. I've noted that VA loans can be dealbreakers for some sellers but towns with heavily military presence are used to it and the market will adjust for it.

# ¿ Apr 4, 2015 23:55

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

Ugh, loving appraisals. The appraiser came in at more than 5% below the contract price. Now my agent's trying to figure out wtf this guy is smoking because he's got other comps on listings that just closed rather than the ones the appraiser used that are proving the price. I know the seller's losing some money in some way no matter what (aside from the captured depreciation that comes back when you sell a rental property).

Edit: in even more confusing news, an appraisal 6 months ago said the place was 11.8% higher then. I have zero idea what numbers a lender will come up with then. My ask price is right smack between the two values, coincidentally enough, so maybe the lender will use that as the basis for the loan?

necrobobsledder fucked around with this message at 23:50 on Apr 9, 2015

# ¿ Apr 9, 2015 23:08

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

Edit: There's no Maryland law that notaries at financial institutions won't notarize mortgage and will documents, but most institutions do not do it for liability reasons, especially after the fall-out of the housing crash. The loan officer's manager I worked with evidently misworded her statement pretty badly in haste. Evidently, most of NFCU's clients have it notarized at their lawyer's office, but uh... mail away closings are kind of common for a lot of enlisted I thought because they might buy and get deployed in the middle of the process? My lawyer's 8 hours away where the house is, I ain't showing up there to sign for my house. I've got work to do.

necrobobsledder fucked around with this message at 02:54 on May 8, 2015

# ¿ May 8, 2015 00:26

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

Anyone know wtf is going on with Progressive (or Ameriprise or whatever is the real backers) not insuring places with insert-style fireplaces in Texas and North Carolina? Another company insured it no problem for about the same rate, but the fireplace I got is installed pretty darn well and meets / exceeds code so I'm completely confused. My real estate agent and my home inspectors have been in the business multiple decades and neither ever heard about this kind of policy. I've repeatedly asked Progressive to ask their underwriter if they'd cover my fireplace with pictures included and gotten nothing, so I'm at a bit of a loss.

Jewce posted:

Edit: Just checked again cause what I wrote sounded off. I was wrong. The less the loan, the higher the rate, which makes sense. Still, I think location has a lot to do with it though.

I wound up at a comparably horrible rate of 4.25% (4% if I had put 20% down) with a loan amount that's about $210k. I really don't want to stay there that long (I mostly bought because the rental options in the area for even $1500 / mo were terrible value), so I went with more liquidity than to get an absolutely lowest absolute cost mortgage. Moving somewhere cheaper and ASAP was my priority to save more per month and help me save faster for more lucrative efforts.

# ¿ May 12, 2015 16:56

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

QuarkJets posted:

It's typical for an appraiser to come in just slightly above whatever your offer was. That keeps the bank happy, it keeps the buyer happy, and it keeps the seller happy. "Oh look at that, the house is worth approximately what someone was willing to offer for it! Weird!"

The margin of error for a home appraisal is huge. Technically that is $2k of equity that you have, yes, but it could easily evaporate on the next appraisal (the one that you'd order in order to get PMI taken off, for instance)

The worst case is that an appraiser comes in, knows your purchase price, and comes in substantially lower than your price even though the comp that was in the same neighborhood with worse furnishings and just a little more land came in another 20% higher than their appraisal price. Between two appraisers within a span of about 7 months and the market getting stronger in the same time, two different appraisers came in about 24% apart from each other for my house. The worst part of all this is that you cannot sue or request re-appraisals like you used to based upon them being "unqualified" because now appraisers are basically litigation immune and truly don't care if you ever use them ever again. My real estate agent that's worked all over the US over 35 years said "this is the worst appraisal I've ever seen in my career" and it wasn't exactly cheap at $800 loving dollars.

# ¿ May 26, 2015 20:48

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

The job market is also much, much tougher for college grads, student loans are keeping disposable income down, and people are getting married later, etc. etc. There are economic and social factors keeping young people from owning typically.

# ¿ Apr 22, 2016 13:53

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

Just listed my house FSBO in a stupidly low inventory market with higher demand than last year. In a weird series of bad and good luck, I got it nearly 10% under the market rate at the time so there's basically no way I'll lose money on this house even though I bought it last May. This alone is enough for me to think that I should sell though (way, way too irrational buyers here). Let's see how much religion will enter my life. Most of the people along my street have been putting up real estate signs and getting motivated, all-cash buyers within 24 hours (most homeowners are retirees here which distorts pricing).

# ¿ Jul 18, 2016 01:38

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

Holy strong seller's market, Batman, for-sale-by-owner with crap-to-nonexistent marketing and cash-only offer in 7 days of listing.

# ¿ Jul 25, 2016 14:18

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

OhDearGodNo posted:

It's definitely a seller's market. Shy of short sales and horribly-kept shithouses homes are being bought in goes to days in my area.

Which area? I'm not even in a real metro area (Asheville, NC) and I was a bit worried that with the lowest median incomes in the state and the highest median house prices I'd be facing an uphill battle unless I dropped my pricing near what I bought for last year despite the rest of the market being up 15%+ over last year. Jobs are still crap here and the average person aged 25 - 34 here typically makes $1500 / mo and has poo poo for savings so their price range is maybe half of the value of my house. Among the 34 - 45 crowd, they almost always have 2+ kids so 3 bedrooms and under 2000 sq ft doesn't work anymore either. My showings showed this schism perfectly. Then along came a really unusual retiree. I don't think I've seen anyone as excited to move into a house as her.

Strange enough, someone called me up randomly with a really low cash offer but if you're actually serious with that much cash you could just take out a mortgage and come in with a stronger offer. Guess investors are looking for rental properties or something because around here people looking below $200k tend to need a mortgage.

# ¿ Jul 26, 2016 04:17

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

During a home sale transaction I don't care about anything besides whether the deal will meet the terms of the contract on the timeline agreed upon. A close date roughly 2.5 weeks after the day of offer as well as an addendum stating that the contract is only valid until 8 pm of the day that I even received the offer is weird, but I went ahead and things are fine now anyway legally. If you're in a housing market where everyone gets multiple offers basically, YMMV.

# ¿ Jul 31, 2016 01:40

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

Selling a house has way less stuff to sign than buying a house, yowsers. 11% gain on my house in a year locked in and liquidated. Breaking out the 18 Year Glenlivet.

# ¿ Aug 17, 2016 01:57

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

BeastOfExmoor posted:

Signing papers to sell tomorrow. Up Escrow company managed to gently caress stuff up and not order our payoff statement until today. I will be so happy to not have to deal with this process again for a long time.

So you made 11% after selling fees, etc?

Yeah, liquid profit. Took my settlement costs - down payment / original purchase price. FSBO so no selling agent fees. There was a buying agent though. $350 fee to the lawyer on our side, and I'm owed a bit because my escrow account is being settled strangely wrt my last property taxes. My lawyer had problems asking my credit union for the payoff statement because they won't let third parties request it, so I had to get it myself. There's an online form so I had no problem. The weirdest thing I found was that our payoff date was for three days after the closing date. I probably should have asked about it, but with the amount I made and the luck I had overall on the transaction I'd rather not complain.

I think the worst part I had in the buying and experience was getting papers notarized for real estate transactions across state lines.

Going back to renting sucks when you have an incompetent property manager that doesn't know anything.

Dik Hz posted:

drat, at least get a decent single malt for that.

I just moved and don't have anything really setup and I had the 18 year in an airplane bottle. Not much to celebrate besides the house sale either so buying any pricey bottle would be a depressing reminder that selling the house might be the only good to happen this year.

# ¿ Aug 17, 2016 15:11

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

BexGu posted:

I'm going to start looking to buy a place in the DC Metro Area and the only places in the location/school systems we like are houses that where built in the 60/70s. While almost all of them have had been redone at some point is there a good list of stuff to look for in such a older house? (Stuff like roof age, aluminum wiring , pipes, etc) that go behind the standard of roof/HVAC/Water heater age.

Having lived in the DC metro area and owned houses elsewhere, I can provide a partial list of things I'd ask about with my inspector.

Piping to mains - "orangeberg" pipes are common from the 50s up to I believe the 60s and many have collapsed requiring total replacements. A number of homes in Shirlington had terracotta pipes that busted requiring $20k+ out of pocket from affected owners
Damage to foundations from continuous flooding, particularly Alexandria homes

Also consider the same sort of stuff that particularly affects homes with high variance in temperatures like in Chicago / Midwest. Thermal stress over the years is not as bad obviously, but it's not like homes in California or Phoenix, AZ that may never see freezing temperatures for years at a time.

# ¿ Aug 25, 2016 02:00

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

QuarkJets posted:

"Do never buy" is directed at people who have come into this thread with big dreams about buying a house with 5% down and then flipping it a few years later because the market is just so hot right now, and also people who fail to budget for maintenance.

I bought a house in 2015 and sold it in 2016 for 11% return after all fees and commissions and the worst thing that happened in maintenance was I had to pay $2k for a sump pump when I sold the house. Do not buy because this is probably not a good sign of a healthy housing market if a place with no freakin' jobs like Asheville, NC heats up that much for sellers.

Dreadite posted:

Does anyone have any experience or advice for offering your landlord money? If I can't end up buying the house I'm currently renting, I'm a lot less motivated to buy, but I feel like it's totally mandatory to try this. I assume getting a direct offer from your tenant is preferable because you don't need to pay 5% to your real estate agent, right?

You will probably want a buying agent as a first-time buyer, it's a fair bit of work to do the due diligence correctly. I skipped it on my first place to help negotiate on price and I got screwed a bit in the end because I didn't know all my rights when buying a condo that are different from buying a house.

If you represent yourself as a buyer, the landlord saves at least 3% in theory, but if he has a selling agent, that's about 3% spoken for. It's a lot easier as a seller to not use an agent if there's an offer though already on the table.

# ¿ Sep 9, 2016 22:17

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# ¿ May 16, 2024 01:28

necrobobsledder: Mar 21, 2005; Lay down your soul to the gods rock 'n roll; Nap Ghost

QuarkJets posted:

Right, you can totally come out way further ahead than you expected on a house purchase. But you can also come out way behind. People tend to assume that a house purchase is a guaranteed financial win but it really, really isn't.

Psst, I lost $35k+ of my down payment buying a house in 2007 and even with that 11% it's not enough to offset that loss completely :rant:

# ¿ Sep 10, 2016 16:02

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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