I need some help figguring some things out . I cant do it I dont guess.
I buy a house for 30 thats burned . I get a fixed 85,000 appraisel. I know its low but it makes it work so I keep my trap shut.
It revceived a market opinion from a group of agents in the same agency that viewed it . Averaged their opinions divided by 8 agents. 96,500. Was told to list it for 99,900.
I listed it for 96, 400 I think. Quick sale I thought . Three months it didnt sell. I did have some offers around 88,000.
Got an offer last week for 90 grand W no warranty. I took it but listen up. They are going to borrow 98,000 on it through the goverment . Goverment is paying all the closing , etc. Costs them nutta to get in it .
Im thinking some appraisors need to be casterated over it . Its not right .
Ive been busting my butt trying to buy repos and they are priced retail through goverment sites. I was told by my broker loans like mine is selling to is the reason why they are that high. When my house repos it will be around 100 grand once charges get nailed.
Were all happy to be paying these taxes so the goverment can invest our money.
Tim
Replies
The purpose is to enable more people to own their own home.
The neighborhood where your house is located is improved by having homeowners rather than renters.
FHA loans enable people to buy a home with little or no money down.
And the ratios are more flexible which allows them to purchase a more expensive home (as opposed to conventional financing)
My parents tried to buy their first home in the 1950's but the bank wouldn't loan them any money.
It was very discouraging for them. They wanted to own a house.
A few years later they did buy a house but it was a lot different back then.
Banks wanted you to pay a large down payment.
Opponents say these homebuyers don't take care of the homes and they default on the loans because they got in "with no money down" so they don't have any risk.
I was thinking that there is a one in five chance you will sell your home and they will default on it (but I can't find that statistic)
Good luck !
+++
Spring Break = Summer Broke
"Were all happy to be paying these taxes so the goverment can invest our money."
I'm not happy paying taxes so the government can create these programs to put the money back into our communities...but I wouldn't turn down the deal on principle. We have to play the hands that are dealt us.
Take the deal, take the check and write your congressman. Then, vote Libertarian.
Bob's next test date: 12/10/07
Blue,
Since 1945 the government has been giving nothing down loans out.
The principle is simple. It's better for the nation and for the neighborhood to have home owners than renters.
Foreclosure rates are determined more by employment levels than by whim or whatever..
The function of the government is to make America strong and properous. Big Old period!!!!!!!
To do that requires some thinking and foresight.
There is absolutely no reason any member of any party has more foresight than any other party.
Its more than 100 percent . They are borrowing 98,000 to buy a $90, 000 house.
We have not always done that . 95 percent yes.
Tim
Mooney,
Rolling the closing costs into the mortage makes sense for young couples just starting out in their first home.
I can't correct appraisers who over appraise things although I think they should conform to some sort of standard..
"The function of the government is to make America strong and properous. Big Old period!!!!!!!"I disagree. Bob's next test date: 12/10/07
Blue,
You disagree that the function of the Government is to make America as strong and properous as possible?
It's strength as you should know comes from it's ability to build what we need to. We didn't win WW2 because we had the most advanced planes tanks and weapons.. we won it because we had the most! Doing that required a lot of money! Part of the properous..
If you believe the function of the government should be to be as weak as possible that also implies that our military is as weak as possible.
You simply cannot have it both ways..
You are funny Frenchy. The function of the government is a lot of things but "making our country strong and prosperous" isn't a goverment function. It might be the results of a wise goverment but that is fast swirling down the tubes. The best thing our goverment could do right now is stay out of our pockets and get out of our way. Let us propser by opening up ALL the markets...(including drugs, bordellos and energy) in no particular order. Bob's next test date: 12/10/07
Blue,
Anarchy and eventual defeat is a sure result of the path you suggest.
We need a strong military to keep from being taken over by other countries. The only way to a strong military is by spending money. The only way to get that money is to have a strong economic base.
Look at the cost of the cold war for example.. Had presidents since Trueman not fought communism do you believe America would still be free?
The government has to do many things to ensure the country is strong.. Look at our interstate highway system for a clear example.. Now imagine the same system built without government aide. How would land be acquired? What if that farmer refused to sell needed access to the routes?
One section the owners could set a speed limit of 15 MPH the next unlimited.. One section you drive on the right the next you drive wherever you want?
Your neighbor could charge you a toll to get to work.. Your other neighbor could refuse to put in a sewer or store junk cars as a fence line..
No one likes restrictions and rules but they are needed for an orderly society..
Yes it's far from perfect but it's the best we've come up with..
The appraiser will see that you bought the house not long ago and he will see what you paid for it.
He will ask you for a list of what you've done to the home to get an idea of what kind of expenses you've had - in order to justify the purchase price.
Good luck!
+++
Spring Break = Summer Broke
theres no figuring it out,it's why the bank ,anb down there in ark went belly up the other day,i actually know a loan officer there,the stuff they did with loans it's no surprise,but others are doing it too.
i sold a house the other day ,same deal as yours,they spent no money buying that house,if they would of rented it from me i would of got a months rent,700. and deposit of 600. but now if they decide in 6 months they don't like the color of the carpet they can just move,they don't have to worry about losing there deposit as a renter.
i have been out of the market for getting a loan for 4-5 years. so the other day i buy a house at auction for 82k,it appraises for 94.5,i'm putting 20% down with a 800+ credit score.you know what i find? no one will lend me money because i have more than 10 properties. W T F?if they lend me 65k and i never make a payment they will absolutely be guaranteed to get all there money back by seizing my assets,but no,sorry buddy your outa luck.
so i ask one loan guy i have a 19 yo kid,no credit what so ever,what can she borrow on this house? they will loan her 103% of purchase price no problem.
what kind of system have they got going on here? are they looking to get these back on repo and if they lose to much money like anb the gov. will come in and write a check and make everything all right?
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Edited 5/18/2008 11:01 pm by alwaysoverbudget
I think there's a few things going on here.First, you aren't a first time home buyer. There are incentives for those folks. Secondly, the mortgage world has been, well, devastated...mainly due to complete lack of oversight and a bit of greed tossed in.So, yea, folks like you are the ones that get screwed. :(I'm no economist, but from what I understand, the big issue is that the banks that gave out the mortgages are no longer holding the mortgages, so there's no immediate need for local lending institutions to really care/help with all the repos, and since there are so many, they're not in any hurry to give out any more money.Ultimately, this is hurting everyone via taxes. We have so many repos in our city now that it's costing the taxpayers money to keep them standing. They're targets for theft (cops) vandalism (fire department) and need to be inspected (bldg department). Then, if any of the above happen, they then need to be demolished. The city is having a really tough time even figuring out who actually owns the house once reposed. On top of all of that, a lot of the investment insurance that was taken out on these mortgage investments was also unregulated and a lot of them went under...which happened to also be insurers of public investments, forcing public entities to then pay for more insurance.Eminent domain is a touchy subject, but this is one of those cases where I think it's justified. No one claims responsibility for the house? The city should be able to take it for a minimal fee and then auction it off to folks willing to fix it up.
You wrote it correctly.
So ;
We cant buy a house because they paid 113 percent of full retail . Well the goverment did . They can leave anytime they choose . Adios, with nothing invested.
I cant buy a house borrowing the money without 15 pecent down requardless if Im stealing it . If I take out a construction loan and fix it I can end up getting 100 percent financing and beat the system. Im ok with that .
You might try using a line of credit to purchase flips since you hit that stop sign. Pay the interrest on it every year. Since you dont have the deal Ive got , you could use your line of credit for you fixer uppers until they are fixed .
What makes the current system unfair is two things that hit me in the gut .
I buy a house cheap and I get a cheap appraisel. This is supposed to be based on the house being in top condition . Same as a construction loan. You build a house and get an appraisel based on completion! If they treated it the same as with me they would only value the lot . No one could get a loan in that case to build a house !
For the readers to understand , they dont just give the borrower 100 percent of the purchase price . They finance all of closing . In my case of the one Im selling they are giving me 90 grand which Im paying the agent so Im ending up with 84,600 for all my effort . Im the one who took the risk and put up the money. The loan the goverment is lending is 98 grand . So of course to be a 100 percent loan it has to appraise for 98. Its way over a 100 percent loan in reality. The problem in the end is the consumer is allowed to pay an overage like Car Mart for a car . They are upside down from day one . If they decided to sell the house it would bring 84,600. If they stay a year or two and dont take care of it , they are deeper in debt if say it takes 20 grand to bring it back to selling condition. Its a good guess it will take 10 grand if they take care of it . Otherwise the people will just keep buying new ones! So in that senario the house is worth 64,600 to 74,600. But they still owe 98,000 because they were given a 30 yr loan wihich paid nothing to principle in the first 5 yrs.
The next problem is when I sell to these folks with no money, it can take 60 to 90 days to close their loan if they dont hit a road block and thats where its getting bad . They hit plenty of road blocks. Over half the loans fall through. I know that going in. Im sitting there with a cash out of pocket investment on this one of 60 grand . It takes 700 per month to keep this house with taxes , insurance , payments , and the water and lghts on. When someone just signs their name to a worthless contract , the house for all practical reasons is off the market for nothing! Sure someone can offer a seccond but they dont . I never do. If I want to buy a house I want first option. If Im a seccond Im ready to move on. If someone wants to look at my house the agent will say , that house is under contract . Gas if nearing 4.00 a gallon and they dont want to waste their time . Lets show somthing I can sell today.
Thats why theres not going to be any more new houses . Thats whats stopped the new home market . Its too big a risk for too small a return. If I had bought a lot and built a new house , my cost would have been very close to 84 grand . Whats the point ? Buy a job with all that risk?
Its also shutting down my market of buying repos . Same deal really although I can always buy cheaper than building , its not a good investment .
This is going to get a lot worse before it gets better . The goverment will have to shut it down when it reaches the bottom of its pocket.
Im trying to figgure out a rope a dope technique to this problem.
Rentals should have a very bright future . Everyone with money should want to invest in them since they can get a solid return much better than anything here. Im thinking about building rentals on spare lots and selling them. That buyer has to put down 15 to 20 percent so hes or she is getting 80 percent LTV. Real LTV! Im gonna run from 100 percent buyers.
Tim
Tim, you seem to be beating yourself up trying to get "A" conventional financing. In the meantime, you are driving by a hundred homes that you could buy "subject to" the existing financing. Or, you could lease option them. Different times call for different approaches. Bob's next test date: 12/10/07
"Different times call for different approaches."
Yes , youre right .
Im usually on top of this game and right now Im beat.
I cant buy those houses that have 110percent financing when the goverment wont drop them. Im talking now about buying them as repos. They will just loan out 110 percent again . My top game is buying repos not rentals . 60 cents on the dollar aint out there to be had.
If I buy another house or sell a rental they will pull the same game on me .
Im the sole bread winner in the house now. I have to make at least two sales this year . 3 wouldnt hurt.
I cant buy another house or build one . The 60/40 odds arent there to gamble . I cant sell a rental unless I have to before the end of the year. In that case I would but its stupid to sell viable income .
My game has closed down picking up repos cheap. Im not giving a reality another house.
Interrest is cheap. Lumber is awful cheap. The demand for rentals is very high.
Looks like its gonna be building and selling rentals . Duplexes , not houses . Someone that buys a duplex should have money down and the appraisels will be based off rent . Rent is the highest its been here. Rent makes the payment till there sold. They dont sell Ill keep them. Thats the best I see right now for my area.
If I flip houses I might as well go to the casino and take their odds . Be a lot easiar to shoot my self in the head. . Builders are doing it right now that dont have another game to play other than building new houses. They should just throw their money down on the black jack table .
Subject to exising financing and lease optioning are two games I cant play. I have to have sales. I dont want any more rentals to keep. Im not able to keep up with what I have now health wise. Im done buying houses unless I can steal.
Tim
Larry, I talked to Shawn Berschauer, Loan Officer, Countrywide Home Mortgage at 10333 E 21st He said they will loan you money to buy another rental but you are looking at a higher interest rate even with your good creditHis number is 609-7947He is a loan officer who has been doing this for a whileI asked how high the interest rate would be and he didn't know til he talked to you moreHe guessed 9 percent.+++Spring Break = Summer Broke
wow 9%!!!! if i had to pay that to own this rental i would just have to flip it and go on,it just isn't that big of a money maker.i just don't think a guy can pay the price that re is bringing,then pay 9,and rents are on the low side now,i can see going in the red big time.i've been through times that i was paying 12-14% and making money[morethan they are now] because the market was in the dumps so hard it was easy to buy something for 30k and pull in 550 a month rent,i miss those days!!!!!
just for grins i just run the numbers,82k house 9% 30 years,100. a month taxes,75 a mo insurance =834.00 [no maintance or vacancy].my opinion on a guy my age you shouldn't blow out past 15 years [i'll be 68]that payment runs 1005 a month. thats not going to work to well on a house i'm planing on renting in the 850 range. LOL ,but it wouldn't be the first deal i've done that lost money......
right now i've got a commitment from commercial fed for 5.5 on a 15 yr,20% down. sounds great,but i'm holding my breath to see if it falls apart...........
they required a engineer study on the old basement walls,did that this am ,engineer said their fine ,just old 1920 walls,so we'll see what they say at the bank now.i'll feel better when i get closing over with.
from my vantage point this should be a walk in the park to borrow some dollars,but i am really surprised at the hoops they want jumped thru to get 65k.i just had another house pop up i would like to buy ,but with all this stuff i'm just going to pass on that one.
probably the last investment loan i took out i think was with shawn,if he used to work at security savings,maybe 8 years ago,i think that was his name??? larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Larry, my boss has worked with Shawn for quite a while and I've tried to send people over to him but I don't think anything's ever worked out Dick Hartwell is the Engineer a lot of realtors work withHe's pretty sharpSounds like you've got things under control and with any luck this will go throughShawn did say that a year ago he could have helped you and he would like to do better but things have changed.Good luck!.+++Spring Break = Summer Broke
This is a social and political issue
Politicians take credit for the percentage of homes in america which are "owner occupied"
Every year Politicians vow to help more minorities become homeowners
These are government programs designed to help low income people
If you guys oppose helping low income people there are liberals on this board who are going to come unglued and unhinged and pretty soon their head will explode.
.
+++
Spring Break = Summer Broke
It's not a blanket 'help poor people' policy. That's part of it, of course, but the other part is coping with a crazy market. Home prices are at an all time high (well, barring the past two years).There's also a difference between first time home buyers who want to live in a house they own and people wanting loans to flip houses. They're not quite the same circumstances. (Not that I don't want incentives to help capable and willing flippers to invest in homes and improve the housing stock)
Edited 5/19/2008 3:20 pm ET by darrel
"Improve the housing stock" YES!
But too many flippers are buying cheap junk, putting in cheap upgrades, cheaper appliances, and selling expensive junk. That's just greed.
"too many flippers are buying cheap junk, putting in cheap upgrades, cheaper appliances, and selling expensive junk. "So, why don't you go into a low budget neighborhood, put in expensive upgrades and high end appliances and show us how the economics work out? Not everyone can afford stainless steel appliances in granite countertops. In all my years, I've always bought the cheapest appliances for myself...every time! If they are good enough for me, they should be good enough for them...whoever them is. Bob's next test date: 12/10/07
I dont disagree with 95 percent loans .
I disagree with appraisors lieing and turning in false documents. They need to be busted and sent to jail. Turn in what ever price the lender needs to work instead of giving a fair appraisel.. The house should appraise the same for them as it does for me . That should be accruate whoever is buying . Truth in lending laws? Hogwash.
Tim
what do you wash a hog with anyway?
you would think they would have learned, about what kind of loan to make, and what kind not to make.
still being devil's advocate i think an apraisal is just an estimate arrived at by statistics, and there is a pretty broad curve.
that being said, your property sold for 90, but was apraised and loaned for 98. that means the new owners have some equity, and unless price goes further south they lose that equity if they walk, not to mention the ding on the credit.
i think with any new (to you) property you have to hold for a little while at least or you lose some (equity at least, for no down buyers) just with the fees and commisions.
is your beef that you wanted 98? i can understand that, i would rather have 98 than 90. but its ok, things could be worse.
You got it a little off . It apraised for 90 to me . It comps for 90 to others around it .
You are the one getting ripped off . Its your taxes they are loaning out at 108 percent LTV. Cant believe everyone is happy about that . It has helped to shut down building like I explained.
I would have taken 90 grand cash in a heart beat. Im not bitching about what I got , if I get it .
Tim
Edited 5/19/2008 8:23 pm by Mooney
Tim the Federal Housing Authority (FHA) has been around for many many years and they state that their program has helped many people buy a home who couldn't otherwise do it.It's great when it works the way it's supposed to.I wanted to make a comment about your appraisal.It's not an exact science.An appraiser will enter your home's info into the computer and see what similar homes have sold for.It's very common to find a range in price from $80 to $100 for homes that appear (on paper) to be very similar.If your house has been redone, then the appraiser will go ahead and price it at the top end.I'm guessing the appraiser is in the ballpark.They taught us in real estate classes that our goal is to price a home and be "within 10 percent" of the sale price.So there's some leeway there..+++Spring Break = Summer Broke
I have a friend that is a RE agent and has some several sellers repairs for her.How she has run into several transactions where the APPRIASOR has required "repairs". And they have all been mickey-mouse kind of things.One of the problems is that I am getting the information 3rd or 4th hand and it is often confusing what they want.One was peeling paint. 50 YO house with on CB crawlspace with 1-2 row showing. The block had been painted and has some slight peeling. Did not matter if it looked pi$$ poor with several colors showing, just not peeling. And the garage had a wood window (the remainder had new windows) that was rotten including missing putting and peeling paint. All it needed was to scrap off the loose paint.And the veneer on the back door was peeling off. Buyer knnew this and was planing on replacing the door. It had other problems then just the veneer. So I had to scrap it and sanding, feathered the edges with exterior spackle and painted.The other house was a bank foreclosure. Fairly new and at first shot does not look bad, but does have lots of issues.I had to fix replace a kludged gas line to the WH (2 section of flex connector with a coupling) although the gas company was there and turned on the gas and left it on to the WH. Replaced the PTR valve and added a discharge pipe. And reattache 2 piece of soffit that blew off. The reason that it blew off was that 2 sections of facia was missing and the lip of the facia was what locked in the soffit. But they did not require that the facia be replaced. Told that by both the buyers agent, buyer, and mortage broker. At the same time there where several other visiable problems just as light fixture that was hanging down and a smoke that was off.And there where other problem that the home inspector found. Including the fact that hot water line was busted under the MB tub. I also found that out when I turned the water on to the WH to test my fixes. That I was suppose to "fix" the WH for the appriaser, but not insure that it works because of the know problem was not passed on to me.Makes no sense why the appriaser needs these "repairs". .
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
I'm guessing your situations involved Buyers with an FHA loans.FHA loans include "FHA Appraisals" as part of the processAn FHA appraiser goes over the house with a fine tooth comb and then demands that repairs be made.Thus the FHA appraiser is protecting both the buyer and the lender by identifying problems and then having these problems fixed prior to the Buyer purchasing the home.Sounds like the FHA appraiser identified some of these problems (some of these are common scenarios):*bare wood on the exterior that needs to be painted*flex gas lines are only allowed in certain situations (dryer or gas stove only - I can't remember so maybe someone will correct me - I was thinking flex gas line is NOT allowed with H20 heater and furnace)*water heater pressure relief valve*discharge pipe from water heater pressure relief valve*broken windowsIt's kind of a game of cat and mouse.Many people, prior to listing their house, try to have their house ready for inspections.Many homeowners will try to do these repairs themselves in advance of any inspections.As a Realtor we have written checklists of things to do to get your house ready to go on the market. We give these lists to the Seller so that they can get their house ready.The list includes painting bare wood on the exterior, roof gutters if necessary, fix broken windows, dirt around the foundation, etcThere are some controversial thingsSometimes an FHA appraiser will want part of the driveway replacedHe may want foggy double pane windows replaced.+++Spring Break = Summer Broke
"He may want foggy double pane windows replaced"There is one of those in the last house also.And no mention of bare wood, which was in both houses. The scrapped garage window in the first one.The missing facia onthe 2nd..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Some of these things are judgement calls.Some of the things don't make sense like the missing facia board. Seems like that should have been on the list.Here's what happens sometimes.The house gets inspected. This could be a regular home inspector or FHA appraiser or even appraiser for conventional loan.Report is written and given to the Realtor who listed the home.Realtor is then driving down the road talking on cell phone and telling Contractor what repairs are needed.The realtor does not do a good job verbally summarizing the repairs list from their memory of the report (especially when the realtor does not know the difference between facia and soffit)Ideally the inspection would be done, the Buyer requests repairs in writing, Seller agrees and signs the written reguest and then the written repairs list would be faxed to the contractor.As opposed to these phone calls where the Realtor says something like "I think we need to replace two or maybe it's three of the windows but I can't remember which ones"..+++Spring Break = Summer Broke
Bill, this is a new business in WichitaThis guy supposedly fixes the foggy windows by drilling a hole, sucking out the moisture, etc etcIt's cheaper than replacing the window.Around here we have foggy window problems with homes built in the 1970's.Sliding patio doors have the moisture problems also.http://www.wefixfoggywindows.com/faqs.htm.+++Spring Break = Summer Broke
A couple of years ago there was a company based in Canada that had a similar system and was developing franchies..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Bad business.
It would be great if it really worked Tim.+++Spring Break = Summer Broke
Im not doubting that it works as far as clearing the glass of moisture. It probably does .
Its again deception to make a deal work.
The window needs the argon gas for the R value.
Im not certain but with out the gas it would probaby rate single pane R value .
FHA inspector should turn it down but who knows since Im sure they know about appraisers. Its an item IM sure that should be disclosed at least for if not, bad, bad .
Tim
"The window needs the argon gas for the R value"It does improve the R-value. But you even without it you have a fair value.I am think that it is like a 10-15% improvement. Still much better than single pane..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
For years Pella utilized vent holes to keep moisture out of their insulated glass. Drilling holes in sealed units would function the same as Pella does. Bob's next test date: 12/10/07
Why put argon gas in them then?
I believe yall are off on this one but Im not arguing .
Years ago I thought storm windows over single pane was better than double windows and I was massacred on here. Im not the one that mastered the argument .
I dont know enough to get in this one.
Tim
Yes. I found out that it was an FHA mortage.On the WH apparently flex gas line is OK as long as it was done correctly.But I found out that another requirement is that the WH "work". I did not light it because the cold water is turned off to the tank because of a break in the hot water lines.The mortgage broker called we to ask where the gas valve was. He was having problems getting it lite, but was using a cigarete lighter. I started to go to the house as it was not too far, but he called back saying he got it lite.When the aprasier came back he could not get it to light. But accepted it as the HI and the broker got it lite.Then he called me wanting to know about fixing the facia. That is after everyone told me that the only problem was the soffit, which was fixed.The broker got some from HD and got a friend with a ladder to install it..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Bill one of the morals of the story is to avoid selling your home to a Buyer with an FHA loan.I would MUCH RATHER sell my house to someone who has a conventional loan.For example, if there is a small minor crack in the basement wall or foundation, the inspector or appraiser will recommend evaluation by an engineer.You get tired of all the run around.But if you want to look at this from the positive side - there is a lot of work for a contractor to do these repairs whenever a Buyer gets an FHA loanI guess we need to look at it as the glass is half full instead of half empty.As long as you've got some coin in your pocket that's the main thingIt's none of my business but when you do this kind of work I think you should get paid THAT DAY and not at closing..+++Spring Break = Summer Broke
"
Bill one of the morals of the story is to avoid selling your home to a Buyer with an FHA loan.
I would MUCH RATHER sell my house to someone who has a conventional loan."
I was beginning to believe no was was hearing me. <G>
Tim
On the first one that I did the sellers paid me directly. It was an inherited house and the owners where out of town. I had done for then earlier on the home and did not any any concerns about being paid.This one is bank owned and they ain't fixing anything.The buyer's agent (my friend) promised that I would get paid if she has to. The sellers agent isn't helping.The last I heard the mortgage broker, buyers agent, and buyer are spliting the cost..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
I hate those kinda deals . There supposed to work I know but theres too many interrests in the till.
On the house Im selling I said I wouldnt pay a dime after I agreed to the price . As far as Im concerned it needs to be a cash offer but its not . So the agents are picking up stuff I wont pay like termite and warranty.
Ive got the house their not gonna get if they dont take care of it . Im expecting a check with out any deductions . Working for deals like that , youre looking at too many people . Sure dont want to miss anything cause you wont get more money.
I sound negative huh? Sorry. Im not a trustful soul.
Tim
mrfixitusa,
Poor people like your children just starting out to build a family? When you're fresh out of college and just starting your career. You would rather your children build equity for a landlord than for themselves?
Renting is better for those starting their adult life because they are most likely to require flexibility of location.
If you want to support them in this stupid endeavor, write a check to someone you hate with the memo "You're locked out of the rest of the world."
Stop telling everyone else where their cash (taxes) should transfer because of some moronic notion that its for someone else's good. They can do it on their own if they want it badly enough.
Equity is meaningless until the sale. If a kid starts upside down in a mortgage, the opportunities for better career paths become much more difficult to follow for many years.
It's a danged stupid practice propogated by inaccurate and inane thinking by those of you that "know better than everyone else."
A La Carte Government funding... the real democracy.
Illustration to your point....In Baltimore a few years ago, the financial institutions were threatened with lawsuits (by activists & politicians) if they didn't loosen their lending standards to include economically challenged city residents to promote home ownership.Fast forward a few years and the same financial institutions are again threatened with lawsuits over foreclosing on homes that the same economically challenged have stopped making payments on.I am sure there is some blame to be shared on the financial institution side of the fence, but the activists and politicians sure added a lot of wood to this foreclosure fire. They have conveniently forgot about their role, though.
What can I say, Tim? You described the situation exactly.
Most of the repos in our town were loaned on with appraisals from an out of town source. We grumble about it, but like others we also make money from the situation.
My thought is that an appraisal NEVER actually finds the true value of a property. Reason? Different perspectives, values, and needs. An appraisal is nothing but an educated guess which doesn't account for the perspectives of the people involved in an actual future transaction.
Rule #1 (I think you know it) is that market value is whatever price a buyer offers and a seller accepts (for an arm's length transaction).
Something happens that you, some appraisers, and some brokers didn't expect? See Rule #1.
Question back at you: Should appraisers be allowed to use only the three highest comps they can find for a specific property (as is usually the case), or should they have to average in some of the similar properties that sold for less?
Hate to say it, but everyone seems to like to complain about the situation UNTIL it benefits them. Then they shut up and deposit the money. I can't seem to recall any seller who wished their property was worth less (sold for less) than it sold for.
In our area it seems that the worst loans were for second (or more) mortgages. With no broker involved and no sale involved and nobody but a property owner wanting (probably foolishly) to borrow more cash and a lender wanting to close a loan things can get out of hand fast.
DW has a home listed now that she sold for about $90k, buyers took a second raising their debt to $130k, were foreclosed on within two years of the second mortgage, she sold same home as repo for $60k (with an appraisal, of course), and now the place is listed for $109k (with some nice remodeling). I don't know how you'd stop such stuff from going on. Yes, ultimately us tax payers foot part of that bill.
BTW, the figures you quoted about what to list for and then the market feedback don't seem unusual or out of what we'd consider to be a normal negotiation range in our market. Our market may likely be more seasonal than yours, so we'd probably say that you might want to wait for a better offer or take the money and run. And right there you have it: you make a decision and your decision helps establish market value despite the fact that decisions to sell for a certain price often are motivated by factors other than the actual value of the property i.e. need cash now? or antsy about the market? or just want to get on with other things now?
No easy solutions, IMO.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
Ive got amunition. Im no virgin on this court.
I just pulled the seccond to last house I bought and kept. 1 year ago. Value should be pretty close . Agree? I pulled this one because I kept it and have imformation on it becasue of what Im going to do. Here we go;
I bought a house and four lots in a small town across the river . The house sits on two lots facing one street and the other two lots thats behind it face a side street. Corner lots make it easy to build on the two back ones .
I made a 100 percent loan of 25,000 to finance the whole package. Thats what it cost total. I went to my banker and asked for the house to be appraised on two lots becasue I didnt thing it would be much difference . She said as long as it works I have no problem. I got an appraisel for 32,000.
I had my agent run comps on that side of the river and my town. She got 22 hits. I ran all of them down and did drive byes. She was familar with 9 of them . Meaning she showed them or saw them on the agent tours. All sales were with in the past year as solds. I asked and she went back and gave me what was on the market currently that fit the description. She got about 30 hits which means theres plenty out there. We sat down together and went over those . Spent the evening at my dinning table tossing them into rejections and keepers and dark horses if we didnt know the properties. I looked at the dark horses and we met back again. I spent that kinda time because I was considering selling all my rentals .
She gave a market analyisis of 75,000. She thought though it was at the top end . Several reasons . So we talked about it . Some of it I cant fix and part of it I can. Well they closed in the carport and made a room which gave the house sg ft for an appraisel but took away from curb appeal. We zeroed the footage as no value which moved it back with out a carport or having a room . That way it should lead the market . Final prediction to lead the market , 65,000.
Then she said that would be perfect . HUH? Sell the house FHA for 65,000 and let them finance closing for up to 75,000. She though the extra footage would make the app work although I wouldnt see it .
Ive got a building permit for a triplex on the back two lots that Ill change to a duplex. The lots are free and clear off the first deal. Ill build them after I sell the house first.
Commercial lot to hold a duplex is worth from 10 grand low side to 15,000 high. It wasnt appraised but I doubt the appraisel would have changed . I think they set the value off the loan amount as I always have .
Ive always asked for a true app to know where I was at buying . Of course Ive always wanted a high one selling but I never get that one . The customer does. Since Im an investor and I buy cheap I get what I sow.
Tim
As with many other things, you are way ahead of the average person in the marketplace!
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
Im not sure im following you so bear with me if im off the subject.
I moved into my house in 1978 bought it for 26 grand, The homes across the street were farm home loans mortgage payments based on income.
The husbands never had an incentive to work anything more then pumping gas as there mortgage would go up the more they made.
Now years later theres only one family still there and homes go for around 375000.Mine was paid off long ago. The neighbor said he would like to move but cant, I asked why not you must have at least 300 grand equity, He said no he would have to pay back everything and if he sold he would have nothing.
So he has to stay forever as its cheap rent and after all those years it backfired on him.
Somewhere you got off on your numbers or you didnt print them right and what he said is false to a point .Its not that bad .
On the farm loans for houses, number S-235 loans was based on your income.
The way that was set up the goverment made up the part you didnt . I could look it up but I just got home from the hospital and cant stand.
Anyway say if the houses cost 32,000 your payments would be 280.00. {say with out me looking it up] Based on your income you couldnt make the 280 dollars so your payments were rated by what you could pay mebbe like 220.00. This went on till you got higher paying job . When you did they would move the payment up . Most people ended up paying max becasue thats the way it works .
My dad offered me my first new house that he had built for 11 or 10 grand somthing . My payments were set up at 75.00 per month. Thats not a misprint . The payment was supposed to be like 110.00. Heres your answer. If I had decided to sell the house I would owe the back money between the two during the time it was like that . A couple of small raises put it right up to max so it wasnt that long a time .
Its not over 20 to 30 years because thats how inflation has worked. LIke in the last two years we have had a raise of prices here of 30 percent . Normally we have had raises through the years of like 3 percent per year and on 10 years that of course 10 percent increase so there money to pay the goverment off .
It might be fairer for him to say he would not make a lot of profit selling it but he also didnt earn that profit .
Tim
maybe he meant if he had to sell he would have to give his first wife half the money, Not real sure but i know he never had any incentive to have anything more then a minimal wage job, But maybes he is just lazy???. He is the only original one out of maybe 20 homes.. I do have another friend with the same mortgage and i will ask him when i see him. hope you feel ok, I remember reading you had a lot of rentals and im sure you have a lot of work to do. I liked what you said before as i told my wife everyone was at the lake while we were working on our rentals. Now they act like we stole what we have