Home buying thread

Noodlemod_sl said:

I can see a realtor submitting an offer for half value if the clients really pushed for it, but I cannot believe for one second that a realtor would actively push for or even suggest doing that.

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They are related according to my grand mother who is the oldest person in the county now and knows EVERYONE and who they are related to.

I have a feeling why, let's say there's a haves and have not deal going on in that county. The agent and the buyer are in the have not category. When my parents lived there another agent (there's only 2 agents in the entire county) contacted my parents and wanted them to buy a house just so she could get the comission and then resell it to someone else. Ummm OK dad told her to fuck off and asked if she had ever taken a math class.

I had an out of towner once who made an offer without an agent based on some info he got from some locals. He wanted to buy it cheap (land not a house) because I got it for "free". Umm OK. I got it in a 3 way land deal with the US Forest Service and a timber company in an attempt to consilidate their land holdings. It wasn't "free" but I was expacted to sell it for less than 1/2 price.

It's an entirely different midset there. When we had an oil boom several years ago some landowners took $250/acre and kept their mouth shut. Then when they found out the average was $5,000/acre with 25% production on a 3 year lease with rights of first refusel to the leaser they wanted to sue...really sue? They took the $250 and wanted to keep it quiet so they could hold it over later that they had made a "killing" on the lease and didn't want word to get out that they had taken that "much". Never understood the people there.

wormie_sl said:

We are talking 50% price difference. Not a few %. You want to do the math how much commission the agent would lose if he told the purchaser to ask for 50% off?

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To be clear, I was talking about real estate agents in general terms, not this specific example. As others have said that shit just doesn't make sense at all, from anyone's perspective.

Thinking about looking for a home. First time buyer here.

Is there anything inherently wrong going with something like QuickenLoans for, well, a loan?

ShakyJake_sl said:

Thinking about looking for a home. First time buyer here.

Is there anything inherently wrong going with something like QuickenLoans for, well, a loan?

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I don't have any experience with them personally but you should shop around. Zillow also has some listings and ratings for banks/rates, quite a few with great rates and low-to-zero fees but again, no experience whatsoever with their customer service. Somewhere like FatWallet's finance section or /r/personalfinance might be a good place to do some research as well.

No idea, but there's a lot of pressure for the feds to raise rates. So if they raise it obviously rates go up. If they don't raise them it's because the bottom has fallen out again.

Pasteton_sl said:

Over 2 and a half years since I started this thread and am still looking to buy a place! Just when I thought mortgage rates couldnt get any lower, theyd dip yet again. But I am pretty confident this is the last year of 4% and under 30 yr fixed.

Anyone have an opinion about west coast housing bubble? real/not real? LA but especially SF. Debating whether I should wait for some kind of market adjustment but rising interest rates have me wanting to keep trying to pull the trigger. (0 for 6 now on house bidding wars, go me!)

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I personally think this is a bad way to buy a home. Treat a home as a consumable object. If you buy a house with no intent of reselling, you'll come out happy. Everyone I know who has ever bought a house to resell, is just unhappy. They are unhappy that it hasn't appreciated faster, or they can't find the next home they want. Can't get their home to close fast enough to purchase the next home they want etc.

As far as LA/SF markets, only you know if it makes sense for you to buy a house there. I'm sure it's a bit more competitive than the Seattle area. However there were still bidding wars here when we were buying. Most often receiving 10 offers the day of listing. One home was done accepting offers before I could get off work to even go look at it. and it had been listed that day.

The problem with buying a house is there is always a better deal out there. If you are waiting to find the best deal, you'll just come out a loser long term. You're better off determining if you want to buy a home, then what you want to buy. Then buying it. The reality is you could get a lower interest rate, and the house at a cheaper price, and still lose your job in a month and none of that is going to matter unless you can get employed again with enough to cover the mortage/lifetyle you had. If you had bought a house 2 and a half years ago. You might be out of PMI now or reduced the payments enough to make more of a difference. The variance of you buying a house with high or low interest rate right now being 0.5% difference and being at the top or bottom of the mini bubble is less than a year of payments. I believe people should buy and hold onto property and only consider selling it once it's paid off. I know this puts me in the minority. But any time you buy any object with the intent of selling it at a profit, you're gambling money. Most people can't afford to gamble that kind of money.

With you chasing lowest price/rate for your house. I hope you're planning on paying it off early as that will have a much bigger effect on the price of your house than anything else.

Homes are long term investments. If you go into it with that expectation then you'll be fine.

If you go into it expecting to flip x in Y months for Z profit then you're in business for yourself and that isn't your "home". Businesses usually fail.

Not to say you can't make a lot of money buying and selling real estate. You just have to be prepared to hold on to your holdings through downturns with a plan on how to keep the lights on. Real estate isn't like the stock market where you can hop in and out of positions.

The winners make long term decisions and sometimes make short term moves when it makes sense. The losers go in with short term plans and no long term prospect and that is what fucks you in the long run.

10% down? You're probably already foreclosed on

Pasteton_sl said:

I don't have any intention on reselling, but buying a 3 bed/2 bath house in the area i am looking, kind of puts me on the teetering edge of what I can afford if mortgage rates go up to,say 6% or higher. I won't be able to pay off the mortgage any time soon - which isn't an issue if I can lock a low rate. But if prices drop 15-20% from a burst bubble, that will substantially affect what level of house I can afford.
Are you saying its not a good idea to buy a house unless you can pay it off quickly?

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I mean the reality is you have to look at income, potential (probable) income and expenses as well as terms. 30 year mortgages paid off in 30 years are dumb as hell. If you are in a job where you make X and you work hard and within 5 years you are going to be moved into a new position to make 3X then doing something you can still easily afford if it doesn't work out but is still a solid 15-20 year payoff may be acceptable. Personally, even though I've gone up and up in value I bought a house I could afford at almost any income level because I wanted to secureanasset before bothering about having a castle to live in and fuck if I can tell the future. That said, with rates where they were for me and certain uncertainty in job location in the next 5-10 years due to rapid corporate growth, I went with a 30 year in case I needed to rent it out if I have to duck out of town in a few. I will probably pay it off in under 10 assuming nothing changes at all, but since the interest tax deduction is worth so much to me in higher brackets, it made little sense to save a few bucks a year but be fucked with a 10/15 year payment term and be forced to sell something I can gain equity in from a renter if I had to go that way.

You just have to be realistic - if you're going to be 75 by time your mortgage is paid off... well...

I'm saying that the outside parameters of interest rates going up, or houses being cheaper are not the biggest factor. In my opinion you're better to jump in and start paying it off than being as efficient as possible. Some people will buy a car with 0 down, and then invest money in the stock market cause they are making money. Then they lose their job and the market is down and they have even less money to pay off the car with. So far with 30 months of house hunting, spending 1k a month. You've invested 30k into temporary housing. If you knew you were staying there, this 30k could have been invested into the house you're going to buy. At the point where you KNOW you are going to buy a house, every month in a rental is costing you money vs investing into the house.

It would be like leasing a car in January, until December so you can get the best deal on the car you want to buy.. Sure cars are cheaper in December for last years model. But will it be that much cheaper than the payments?

Also I find there is more variance in the market than the bubble. Being able to choose a house and negotiate it down to a price you like, will be much more likely than a housing bubble burst.

Another example we ran into while buying. Housing bubble burst, people wanted out... The house we bought a month ago, 6 years ago was $380k. They listed it at 320k. We eventually got it for 308k, plus 8k in closing costs paid by the seller. Luckily this was a house that was paid off already and lady was going into a home. But imagine it was a working couple that owned the house and they had 300k to pay it off to the bank. With seller fees they'd have to take like 310k as the lowest. So yes, you can get things cheaper when the bubble bursts, but you will run into a lot of people who need out but simply can't get out for under X.

You're much better to search for a house you are in love with. Then spend the money. Here is what we found. As money got cheaper to borrow. Competition got more fierce. Our home we purchased has a property tax of 270k. We paid essentially 300k for it. So in theory if nothing changed we are under water by 30k. That being said we look at it like we are just paying the rent to live here and love it. Whether it's 500k or 200k value doesn't effect how much we like to live here. In fact it appraising for 270k saves us money on property taxes. On average though, homes were going for 10-20k above asking here. The real estate agents we talked with besides our own said money is so cheap, everyone is throwing money at houses.

I don't know if you have this going on in LA, but here in Seattle. We have Chinese investing in housing HARD here. Someone said something like a luxury apartment is something like 4 million there and only 4-500k here. There was an article in the paper a few weeks ago about a Chinese firm buying up like 4 billion worth of real estate to make Chinese condos here. It's been on the news that we are competing against foreign money as well as locals to buy homes here.

Focus on the things that you need. If you need a yard, find a house with a yard. If you hate neighbors, find more land etc. By the time you're old and you've paid off your land, you'll be hard pressed to have lost money compared to renting. The reason to buy is to get features you can't get through renting. Also in general, as the bubble bursts, rents go up, house prices go down.

meStevo_sl said:

I know its not ideal but anyone ever put 10% down on a conventional? Can you drop the PMI once you hit 78% or do you have to wait 5 years like FHA?

We've got 50k+ equity and should have 20k+ saved by the fall/spring, but not assuming we'll get the max out of selling. We were also planning on selling, renting for a short period and then buying to avoid and funkiness with some kind of contingency arrangement since we need the equity to buy. We just paid off $40k in debt over the last month leaving just student loans and current mortgage.

End goal is to be in a place we love and with good schools before son starts school fall 2017, our only obstacle to getting a house in the 350k-400k range is probably our down payment. Would probably focus on paying extra and dropping the PMI asap, then assume we'd need to refi into a better rate?

How many different ways is this a bad idea?

. Happy to rent for a year and get the funds together, but really want to make sure my son doesn't end up changing schools because of it.

All else fails, we'll just get a cheaper house.

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We chose to go with 5% down conventional. After a similar situation. We paid off all debt which wasn't that much. But Saved 19k cash in 4 months for our down payment. When looking at saving up to 60k, to be able to put 20% down on a 300k home. Vs what will the interest rate be in a year when we have that money? Plus the cost of rent. It made sense for us to just go with 5% down and pay it off asap to get out of PMI.

The big thing, at least what I didn't know when I was at the super beginning stages of saying I want to buy a house. Even with 5% down. We needed like 26k cash to close. We ended up having the seller pay some closing costs so it worked for us. But to put 20% down on 300k. You'd need basically 70k cash on a 300k house. I'd say your biggest question you can ask yourself is, is your income stable. Can you be diligent about paying extra to pay it off early and finally. Will the interest rate go up from here? If not, keep saving. If you think it'll go down more keep waiting.

We only went with this plan because we could qualify off 1 income for this house. Being self employed, I'm worthless on paper. They basically treat you like you could make a million dollars today, and lose a million dollars tomorrow so your income is too risky.

That being said, saving 3-4k a month into saves on top of our 1400 a month rent, didn't mean anything to lenders. If you had 2 people with incomes and horrible spending habits, they are more qualified on paper.

meStevo_sl said:

For the house we're in now we really stuck to a price range and didn't push things, but there's truly another tier of houses in the ~$350k range in Vegas that at this early stage we'd be happy spending damn near the rest of our lives in.

I mean damn, look at this place -9900 Long Cattle Ave, Las Vegas, NV 89117 is For Sale | Zillow...

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Funny part is: ?Last sold: Jun 2009 for $250,000