Home buying thread

Nice neighborhood I"m trying to set myself a limit of 150, with an absolute cieling of 160 for a really amazing deal. I"m just a single guy and will be renting one or more rooms to a friend, so I don"t want to put myself in a position where I can"t pay the mortgage on my own if I have to.

I"m comfortable with a little bit of a drive, I come in every day from Sandy Springs right now. Honestly what"s more difficult is finding somewhere that I can reasonably get a roommate to move in. My current roomie works in Alpharetta, and just about anything not on 400 is a godawful drive. Still, I can"t really take that into consideration when buying a place I intend to stay in for years.

I was informed immediately by the Mortgage Broker that paper trails will be required for the down payment funds, as well as deposit records from employers. They also ask for complete bank statements (not just funds, but every single page that shows various retarded things you pay for, like excessive amounts of game subscriptions ) In addition to that, they [Chase] wanted 6 months of canceled checks from rent paid. Chase was extremely involved in verifying everything, and even did not one, but three appraisals on the property (two walk-throughs and one drive-by + paper comps run).

Regarding short sales, if it says Lender Approved chances are that is theminimumamount they will accept. It may differ where you are, but there"s no negotiating -anything- on a short sale around here. We lost 2 short sales, and one we overbid and had the highest offer but they took another due to it being an all-cash offer (less work for them), the other one the listing agent "misplaced" our offer and their client ended up with the winning offer which the bank later declined and called us (we had found a normal sale by then, which is where we live now).

You also need to watch for them being very low prices and not being lender approved, listing agents put very low prices down to bring in traffic in hopes of a bidding war and it usually works. In California, the listing agents don"t follow the guidelines at all. They"re supposed to upkeep the listed property but since they sit stagnant on the market for upwards of 100 days, they don"t do it (as they don"t get paid until the property sells and that cost of upkeep comes out of their pocket in the meantime). Banks also only give them a small allowance to fix anything that may have been destroyed by the previous occupants, I saw one ignore holes in the wall and bought trees for outside instead.

I also found myself concerned if the property was still occupied and not being kept up, or if it was a rental. If they"re vacant with junk still in them, they get "auctioned" to contractors, whoever bids the job with the best price will trash out the place and that"s usually when things like appliances go missing if the owners or renters didn"t already jack it. The third one we didn"t get, they took the toilet seats, fireplace mantles, etc.

I"d go for REO"s over Short Sales in a heartbeat. BUT after going through that experience, unless I had a lot of time - I"d just ignore them and stick to Normal Sales. There"s a lot more room for negotiating and even less bullshit to deal with.

Either way, keep in mind most SS"s and REO"s require Bank Approval whether or not you have your own lender. Having that said, you"ll want to do that in a months time or your FICO will end up fucked. Bank of America is notorious for "accidentally" running you 10 times in a row, then offering you a sweet deal if you use them as your lender to "make it up to you" (Google should yield good stories). Wells Fargo and Countrywide have a metric fuckton of Short Sales and REO"s so they take the longest time to get back to offers, I think a few other larger banks took over some of theirs, though.

I"m happy some of the things fell through for us because I love where we are now, but I"m still asshurt over the first one that got away. The office was on the bottom floor, next to the kitchen and had an attached bathroom. It also had these gorgeous french doors that opened up to a large patio with a built in fireplace. It was across the street from the Farmers Market and within walking distance to all shopping (grocery, pharmacy, dry cleaner, vet, dentist, etc.)

Yeah, the first one I bid on I really liked, it had some great features and was in an established neighborhood with a good reputation. Can"t really ask for more in a first home.

I"m not looking just at REOs or short sales, I"m in the market for anything. My biggest problem is finding a place with good road access to get down to my office, but close enough to people I know and their workplaces that I can rent out a room or two. It"s a tightrope.

Of the two identical properties I found that I"m interested in, one has a finished basement, the other has a fence. Otherwise they"re the same floorplan and the same price. Given the choice, I"d rather take the one with a fence and finish the basement myself so I could customize it to my own liking without having to tear out what"s there. They"re both listed as "possible short sales" at 159. I"m inclined to offer less on one, see what they say, then use the existence of the identical property elsewhere as leverage. They"re only a few miles apart, I"m hoping that the two owners might be willing to play ball.

I"ve been told by multiple parties not to worry about hurting people"s feelings. If they want to cry like a little bitch with a skinned knee, so be it, but they"re still gonna have to make a mortgage payment next month.

My strategy thus far (and I"m still house hunting, so you can take it with a grain of salt) is to make an offer that"s fair given the neighborhood and condition of the home, but never more than 85-90% of list price. The worst they can say is no.

In some areas, housing prices have been so bloated and falsely inflated, that I personally wouldn"t even look at buying unless I was planning on living there for a good long while. Housing has gone up at a rate (I want to say double in a lot of the troubled spots), and is a rate that needs to be readjusted before it starts going at a healthy incline. So at this point in the game, I think at best any offer is an educated guess, with most just being a number hit by a blind dart throw. The days of doubling your investment or making a huge profit in just five years are long long gone, I"m afraid. I"m also glad to hear you are really taking your time and thinking this through Heylel. Keep plodding and wait until you find that perfect mix of interstate access and accessibility to your friends and family. It will pop up.

TheCutlery said:

Fuck it. If you can pay the bills stealing and drug dealing, who are they to judge!

The "take out another loan for down payment that hasn"t shown up on your credit report" thing is actually logical though. That"s the reason that makes sense for the policy, so I understand it now.

So, here"s a question I have. My wife and I were looking for houses last year, but with the way the economy was going, we decided to wait. we looked at a few of them, and I just was not seeing the value of what people were asking for the house, so I told my wife "We should just offer em 200 (on say a 250k house) and tell em to take it or leave it. It"s been on the market 6 months, they probably ain"t getting shit for interest." She said we can"t do that, and if you lowball a bid like that you need to provide reasons for why you think the house isn"t worth what they"re asking. Is this really the case? I don"t really give 2 flying fucks if people think their house isn"t worth their inflated bullshit number. If they want what I value the house at, the have the option to take it, if not, no one"s twisting their arm. Just seemed like kind of an odd thing back in the day, and I had forgotten about it until all this talk of lowballing bids.

Click to expand...

I wouldn"t worry about giving a lowball offer. Like I mentioned earlier in the thread, there are some sellers who would like just one offer, no matter what it was. The worst they could do is laugh at it, come back with the original offer and then you walk away.

The one thing I don"t understand is when you go into some of these houses (I"m talking about occupied houses) and it just looks like shit inside or they did a half ass job of staging it for buyers. These people don"t understand at this point, they are competing with THOUSANDS of other houses in their area and you got to do everything in your power to try to make the house sell. Then they wonder why the house hasn"t sold in 6 months.

I"m looking at another short sale tonight. Good area, close to friends and family, long drive to work. It"s on the market for 160, neighborhood is priced 180-195. It"s a short sale, so I might not have too much room to maneuver on the price, but I"m hoping.

If it"s in decent condition on the inside and the pipes look alright, I"m planning to offer 144 and see what happens. Might be too high, I don"t know.

I"m running into the same problem. I made an offer today on the house I mentioned earlier that was listed at 159. I had my agent write up an offer of 145 as an opener.

He sent me the comps with a note saying "be aware this house was previously listed at 222k and expired, so I seriously doubt 145k is going to get us a good counteroffer". He recommended I up my first offer closer to the current list price.

Now, 222k is obviously far too high. It"s even high for the neighborhood. Seems to me this should be obvious, after all no one wanted to buy it at that price and it expired. However, my buyer"s agent is stuck in the same mindset as lots of other real estate pros and seems to think that the list price is what the home is worth, when it"s simply not. If the listing agent honestly thinks any price at or near 200k is fair for the home, they"re living in a dream world and it"s no wonder the home has been on the market for months. I"m honestly wondering now whether or not the current list price was just a bid to drum up interest. The sales history shows it hit the market in January (apparently its second listing) at 205, then dropped to 195 two weeks later, then to 159 in early February.

I know what I can get a comparable house for if I keep looking. I have friends who have recently bought similar homes for around the same price, if not lower. I also happen to know it last sold for 178, since I called the seller"s agent myself and she let that slip on the phone before she realized I had a buyer"s agent to represent me, so I know what they owe. Since the property has now come under control of a bank while it"s in pre-foreclosure, they"re suddenly trying to squeeze out every dime and costing themselves a mint in the meantime.

On another note, this is the last time I get stuck with a buyer"s agent. I"ve learned enough from dealing with this and asking experienced friends that I simply no longer want that layer of insulation. I"d rather just deal with the seller myself, so that I"m free to call as often as I want, be aggressive, and get the deal done for myself. If I hadn"t had to sign a 90 day agreement with my agent, I"d drop him now and finish this whole thing on my own. He"s just not providing me with all that much of an advantage.

I think in your case you"d have been better off with a Realtor over a Buyer"s Agent. I"d just flat out ask the agent if you signed aBuyer"s Broker Agreement(which may have another name) and if so, if you can break it.

If you"re confident at working "solo" just make sure you educate yourself more on sale types. Chances are, going into Distressed Sales - the Listing/Sellers agent is going to try and sign themselves as both the Buyers and Sellers Agent for double compensation. I don"t know if it"s offered in your area, but check out Redfin.com - so you at least have "something" backing you.

The thing with Short Sales, which I"m sure you"re starting to learn is that they list low "bunk" prices for traffic. I wouldn"t even touch one that doesn"t have a LENDER APPROVED price. They have a ton of distressed sales right now which leaves you with very high wait times. You have to offer a fair price, but the problem with Short Sales is in some cases more than one Lender is involved, so you need to have two lender approvals. My Agent (who is a Realtor) would check tax, sale, etc. records to see the home history information; purchase price, loan type, number of loans, and the important part - how much is owed on the loan before even getting my hopes up . After having that, he"d check the comparables. The thing with comps is on normal sales, you can"t use distressed sales as comps and likewise for distressed sales (which thankfully also applies to Home Appraisals, too).

The Listing Agent mentioned in your post is doing something theyaren"t supposed to do, which isre-lista property that didn"t sell. Those don"t expire, they pull them and relist them intentionally to hide the DOM and the "real" price.

A good Realtor is hard to find (the ones that work). They don"t get much from Distressed Sales. Not sure in your area how that goes, but here our agent would have gotten 1-2% versus getting 3-5% and in CA, it"s like getting 5-10k or 30k (obviously depending on the home sale price). I was happy we got a Normal Sale because our agent deserved every penny he made (which was a lot of pennies...out of the sellers pocket)!

Your agent shouldn"t have even helped you prepare that offer, he should have just checked the home information and told you it was a waste of time. I really hope he"s not having you get pre-approved with the banks that own the properties or your FICO is going to get raped.

Almost every Short Sale I saw had DOM at 100+. What"s hard to find but always a joy, is a brand new REO listing (BofA REO offer responses are really fast since they use a pseudo-lottery type system).

No, I"m being approved once by my lender and that"s it. I"m not gonna have my credit score get shredded over a house I won"t even get.

To my agent"s credit, he did tell me we"ll be in for a long ordeal if I"m serious about this property, and that it"s unlikely to materialize. However, he hasn"t been proactive on any front, not finding places to show, nor in collecting information. I get a daily automated mailer from his company with new homes in my range, and that"s it. There"s no searching or filtering happening on his end.

Wow, that"s pretty lame. I"d get the automated list, then send him the MLS numbers and he"d respond with a detailed temporary webpage and an attached excel document that showed the purchase, tax and loan history on each home. I"ve attached an example of what the history looks like, I have a better one somewhere but that"s the one I copied for myself to highlight things I liked (P for Pool, L for Loft, Off for Office, and obviously any Normal Sales). The one straight from the Realtor has more detailed information, but this is so you get the idea of what information your agent can access for you.

Heylel Teomim said:

No, I"m being approved once by my lender and that"s it. I"m not gonna have my credit score get shredded over a house I won"t even get.

To my agent"s credit, he did tell me we"ll be in for a long ordeal if I"m serious about this property, and that it"s unlikely to materialize. However, he hasn"t been proactive on any front, not finding places to show, nor in collecting information. I get a daily automated mailer from his company with new homes in my range, and that"s it. There"s no searching or filtering happening on his end.

Click to expand...

I hear what you"re saying about the agent being proactive, but in my case I"d prefer to do my own searching since I know exactly what I want. The agent has a decent idea of what I want, but there may be something things that eliminate for me that he may think it should be on the list. Our agent had suggested a couple of properties to us, ones that weren"t even listed yet but were getting ready to come on the market. But other than that, I find it better to do my own research on the house, from layout to tax records to how many owners it has. The agent is there to be a 2nd set of unbiased eyes on a property and to represent my interests when it comes to negotiations. Plus he/she can pull MLS data and comps, stuff that you don"t have access too.

Keep in mind also that alot of times when you make an offer and it"s somewhat low, the seller has a better chance of taking it more seriously if you had an agent then if you didn"t.

Pardon my getting off the subject at hand but still on topic, I"m also looking to pull the trigger on home numero uno and am finding the whole process a little disheartening. A single family starter house in my area goes for about 250k, give or take. I"m 32, single and a pretty handy guy, so I"m looking for something basic that I can put some work into and move up from in about 5-10 years.

Just an example of something in my area:

Stone Ridge Properties Real Estate Agency servicing home buying and home selling in Northeastern Massachusetts and Southern New Hampshire.

A quick pass through the mortgage calculator:, 225k for the house, 5.5%, 30 years, 1.25% property tax and 0.5% PMI puts me at $1605 a month just for the mortgage.

Now, I make just under 90k a year, so monthly after retirement and other deductions I take home around $3500. I have no debt at all, nothing, zero, not a single credit card balance, own my car, own all of my toys and have all of my student loans paid off, and as such I have a FICO in the mid 700"s which should be good enough to get me a-paper on whatever I"m looking for.

The issue is this, some rough math that hopefully some of you obviously much-more-adept at this can shed some optimistic light on for me. Again rough numbers, monthly, aiming low, and mostly thinking out loud because this thread is excellent and you guys certainly know your shit.

Mortgage: $1600
Cable/Internet: $100
Water and Sewer: $100
Heat: $150
Electric: $100

That puts me at ~$2000 for the basics. Now I tack on:

Cell phone: $100
Gas: $250 (I have a good sized commute, 60 miles each way)

So now I"m at a ballpark $2400 and I haven"t even factored in food. Say I"m frugal and drop $100 a week on grub between dinner, lunch, breakfast and a few beers here and there, I"m basically at a $500 make/break point and I haven"t put a dime into savings.

That"s not good. That"s one car problem away from "Oh shit, I"m fucked". If my TV breaks I"d need to save for a month to buy a new one. Medical problems? Family emergency? Forget it. I can"t get my budget that tight where I"m paycheck to paycheck and always one away from being completely up the creek.

Am I off anywhere here? My question to you guys is this - for all extents and purposes I"m a financially responsible guy who makes a relatively decent living. I"m by no means wealthy, but 90k is a decent salary and the fact that I have no debt screams to me "You should be able to afford a home right now, why can"t you?"

I have friends with a stack of debt that make less than I do, who have shiny new $400/mo auto loans who have houses, yet I"m putting what I think is a responsible budget together and I end up with night terrors thinking about it. What"s missing from my equation? If I had to I could pull 20% down from my retirement fund, but man I"d really hate to do that. The biggest problem for me is the lack of savings. I"ve always been good with my money and do what I can to toss a decent amount into the bank every paycheck. Not having that security blanket just isn"t something I can stomach. :\

Edit: Sorry for the novel, but would love to hear what you all think.

Here"s my 2cp.

I bought my first house back in Fall of 2007, while the market was slower, but by no means as good as it is today. I see that some of you have some pretty hefty budgets, but I was a little more restricted at the time. I was 22 years old at the time and didn"t want to spend more than $200,000 if I didn"t have to, though when I made the decisions I had no idea what I"d have to spend. After substantial research, I found that for me, building a house would be better than buying, especially with all of the new developments. I ended up linking up with a builder in a gated community a little ways out into the country, right off of I-95 (Savannah, GA). The reason I liked this method was because I was able to choose my plot, a fairly large one with a lake behind it, as well as everything in the house--everything. I chose the model I wanted, I moved some things around in the bathroom (pushed out the walls a few feet), made the closets walk-in closets, made the windows bigger, enlarged the garage, shaped my driveway etc. The disadvantage was that I had to put up all of the blinds etc. myself. I could have had the company do it, but with $15 blinds from Walmart, you can"t beat it. I also ended up getting glass encased blinds for the doors from Lowes as well as some other stuff. Anyway, the house ended up costing just under $170,000 total. When I get back (currently deployed) I"m going to redo my entire lawn (it"s huge) and add some lighting as well as a centerpiece for the front yard, I"m thinking weeping myrtles with some flowers and a few other things. All I plated so far were some crepe myrtles all the way around the house and a few shrubs.

The house is about 1500sqft with 3br, 2ba. Aside from the plasma TVs, I"d say I decorated the entire house (paintings, mirrors and all) for under $5,000...and it looks damned good. I"ll try to get some pictures of the finished product some time. Just to mention though, Walmart and discount furniture stores are the shit, I got plenty of good deals there. I go to Lowes for everything else...not as cheap, but they have the specialty stuff you cant get at those other places. At a discount furniture store in Hilton Head, SC I got an Ashley furniture set of a love seat, lazy boy chair, couch (that folds out into a queen size bed), and ottoman made of this rich black, soft, stain resistant material for $1500. My coffee table and lamps I got from my parents (thankfully they just redecorated). In my office I"ve got a large wrap around table with nice glass for about $200. I guess what I"m trying to say is stay the hell away from the expensive places...not worth it for decorating, unless you plan on buying high quality rich wood furniture and never redecorating. I would, but I move too often for that. I"ll try to get those pictures soon.

Cheers

double post

Oh, forgot about financing. Originally I think my mortgage was 30yr at 6%. I refinanced almost exactly a year ago (March 2008) to a 15yr at 5.00%. I could probably do better now, but even if I got an interest rate in the 4.XX% I"d be saving maybe $50/mo, maybe more...even if it was $100/mo, not too concerned. My mortgage now is just under $1500/mo including insurance and all of that.

Cad said:

I"d check your math a little bit. $90k/yr is like 7.5k/mo gross. Figure 20% overall tax rate, 6k a month. Retirement might be 5%, employer match 5%, so 5700.

Where did your other 2200 go that got you at 3500/mo? You"re leaving 26k a year on the table there.

Click to expand...

I just did my taxes (huzzah) a couple of weeks ago, and I claimed 88k last year. I"m salaried + overtime - my base is 75, but I travel a decent amount which makes up the rest. I"m throwing out my average, non-overtime pay - my apologies, should have made that a bit more clear, but my line of thought is that even with travel pay, it"s still cutting it uncomfortably close. I just don"t want to be house poor, know what I mean?