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Old 11-03-2009, 02:18 PM
 
Location: Sometimes Maryland, sometimes NoVA. Depends on the day of the week
1,501 posts, read 11,738,478 times
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Quote:
Originally Posted by firefightermom View Post
Not really...when I sold my townhouse in Germantown, we got a lowfall offer that was laughable. They didn't want to raise their price, so we sold to someone else with a reasonable offer. Guess it just depends on how desperate the person is to sell.
Totally agree. When I sold my townhouse in NoVA, our first offer was $50k under asking. We laughed and said come back with your best. $30k under asking. We told them to take a hike. Ended up selling for asking 2 weeks later.
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Old 11-03-2009, 05:45 PM
 
26 posts, read 63,106 times
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Quote:
Originally Posted by Dreamy46 View Post
I'm going to make a couple of assumptions here. First, that you know that tax assessments are done every three years and that all these assessments you listed were done on 01 January 09? Second, that you used the MdLandRec site to verify the mortgage amounts? Third, that you're going to get stuck paying most, if not all, of the closing costs on the short sale? The others?

#2 sounds way overvalued as you stated.

I'd have to go with the short-sale. If the house is in good shape, I'd offer 270k, or 250k if you're feeling cocky, and not worry about getting outbid or getting turned down. It doesn't sound like people are lining up to buy it anyway with that much DOMM. Plus, it managed to escape getting bought during the tax credit feast, which doesn't bode well for the property.

I will tell you I've seen plenty of short sales sell for half or less of their tax assessments if they needed any work. That opens up another question, why not hire your own appraiser to put a value on the one you'd most like to buy? What's $300 when you're spending this kind of money?

The price trend is still down, and if you don't get a lowball approved to give you some cushion, you'll just be the next negative equity victim on the list.

We've discussed it in some other threads, but the real deals won't come until after the tax credit and other government intervention ends...
First off thanks for all your help.

The original accepted offer for the short sale was 305K and they agreed to pay 10K of the closing costs. It fell through bc the buyer didn't want to wait 120 days for it to close.

The appraiser idea sounds really smart, I think I'm going to focus on the short sale and the third home so maybe I'll get those two appraised. After thinking about it, the second home is overpriced and I'd have to go atleast 60-80K under the asking price to even get a decent deal. Obviously I'd just be wasting both of our time

So you think we'll see alot of better deals several months down the road? Honestly I'm in on rush to buy a home so if I can't get these homes at the price I want I have no problem waiting and pursuing different homes.

Thanks,
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Old 11-03-2009, 07:06 PM
 
Location: Bernanke's Financial Laboratory
513 posts, read 1,220,724 times
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Quote:
Originally Posted by danny01 View Post
First off thanks for all your help.

The original accepted offer for the short sale was 305K and they agreed to pay 10K of the closing costs. It fell through bc the buyer didn't want to wait 120 days for it to close.

The appraiser idea sounds really smart, I think I'm going to focus on the short sale and the third home so maybe I'll get those two appraised. After thinking about it, the second home is overpriced and I'd have to go atleast 60-80K under the asking price to even get a decent deal. Obviously I'd just be wasting both of our time

So you think we'll see alot of better deals several months down the road? Honestly I'm in on rush to buy a home so if I can't get these homes at the price I want I have no problem waiting and pursuing different homes.

Thanks,
I'm still renting because of the current price situation. And yes, I do believe the best deals are yet to come. The First Time Buyers Tax credit has put a lot of cockiness back in the market, especially the past few months as the real estate agents stepped up the "you better buy and use the credit before it's gone" campaign. Prices will never find their true bottom until after the government quits stimulating sales. Case in point, the car sales crash after Cash for Clunkers ended.

Another issue is interest rates. Sooner or later the FED has to quit their involvement there as well. How much longer can they throw savers under the bus and pay them nothing for their savings? For every 1 percent interest rates rise, that means a 10% drop in home prices. Getting a low price always trumps a low interest rate because hardly anyone keeps a house enough years to benefit from those low rates. Worse, a lot get suckered into paying points. Study the loan amortization tables out on bankrate.com and you'll get the picture quickly of where the first ten years of payments goes.

You don't have to worry about missing out and not getting a foreclosure. Besides the large amount still in the pipeline that the banks are holding and have yet to release, there's plenty to come from people that have bought to early on the ride down. The FHA has stepped in quite heavily to replace conventional lending with essentially 100% loans and those will ensure there's no shortage of no skin in the game defaults as well.

Getting a reputable, independent appraiser is definitely the way to go. A couple of reasons why. First, that appraiser will be working for you and you don't have to share the info with the seller. Second, it'll give you a reference point to compare with the lenders appraisal in case issues arise with that.

Last, I enjoyed reading all the people's comments about lowball offers, and I'd like to thank folks like them, because they saved me a lot money. I almost bought in 2007. I was pitching $100,000 off lowballs on $500k houses. The agents and the builders were laughing at me and saying no. Every single one of those properties eventually sold in the 300's. There's an even more valuable lesson to be learned from their negative comments though, which is, if you're going to buy, then buy a short-sale or foreclosure and avoid the pleasure of dealing with them.
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Old 11-03-2009, 07:55 PM
 
407 posts, read 1,261,105 times
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Yes, the banks are holding on to the foreclosures and that is because they can't sell the ones they already have. If you had seen the ones we have, you would know why. If you buy a forclosure, better hire your own inspector as well and go through it with a fine toothed comb. Same with a short sale
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Old 11-03-2009, 08:33 PM
 
26 posts, read 63,106 times
Reputation: 17
Quote:
Originally Posted by Dreamy46 View Post
I'm still renting because of the current price situation. And yes, I do believe the best deals are yet to come. The First Time Buyers Tax credit has put a lot of cockiness back in the market, especially the past few months as the real estate agents stepped up the "you better buy and use the credit before it's gone" campaign. Prices will never find their true bottom until after the government quits stimulating sales. Case in point, the car sales crash after Cash for Clunkers ended.

Another issue is interest rates. Sooner or later the FED has to quit their involvement there as well. How much longer can they throw savers under the bus and pay them nothing for their savings? For every 1 percent interest rates rise, that means a 10% drop in home prices. Getting a low price always trumps a low interest rate because hardly anyone keeps a house enough years to benefit from those low rates. Worse, a lot get suckered into paying points. Study the loan amortization tables out on bankrate.com and you'll get the picture quickly of where the first ten years of payments goes.

You don't have to worry about missing out and not getting a foreclosure. Besides the large amount still in the pipeline that the banks are holding and have yet to release, there's plenty to come from people that have bought to early on the ride down. The FHA has stepped in quite heavily to replace conventional lending with essentially 100% loans and those will ensure there's no shortage of no skin in the game defaults as well.

Getting a reputable, independent appraiser is definitely the way to go. A couple of reasons why. First, that appraiser will be working for you and you don't have to share the info with the seller. Second, it'll give you a reference point to compare with the lenders appraisal in case issues arise with that.

Last, I enjoyed reading all the people's comments about lowball offers, and I'd like to thank folks like them, because they saved me a lot money. I almost bought in 2007. I was pitching $100,000 off lowballs on $500k houses. The agents and the builders were laughing at me and saying no. Every single one of those properties eventually sold in the 300's. There's an even more valuable lesson to be learned from their negative comments though, which is, if you're going to buy, then buy a short-sale or foreclosure and avoid the pleasure of dealing with them.
Yeah I told my agent from the start I wouldn't rush to take advantage of the tax credit. The thousands of dollars is nice but the reality is it's not worth it if it costs you tens of thousands rushing to buy a home.

Interesting point, I never thought of that with the interest rates to home price.

Yeah from what I've heard there are a lot of foreclosures in the pipeline. I don't want to buy too soon, but I feel like if I can find a deal now, then I'm ready to buy.

Thanks for your advice, think I'll go with low ball offers and try to get a good deal. If they don't get accepted no skin off my back, I'll just keep looking at homes and foreclosures and saving up more money for my down payment. Eventually I'll find a good deal and a home I like. I'm in a situation where I don't pay too high a rent and pay on a month to month basis so when it's time to strike I'll be ready....
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Old 11-04-2009, 09:27 AM
 
Location: Bernanke's Financial Laboratory
513 posts, read 1,220,724 times
Reputation: 225
Quote:
Originally Posted by danny01 View Post
Yeah I told my agent from the start I wouldn't rush to take advantage of the tax credit. The thousands of dollars is nice but the reality is it's not worth it if it costs you tens of thousands rushing to buy a home.

Interesting point, I never thought of that with the interest rates to home price.

Yeah from what I've heard there are a lot of foreclosures in the pipeline. I don't want to buy too soon, but I feel like if I can find a deal now, then I'm ready to buy.

Thanks for your advice, think I'll go with low ball offers and try to get a good deal. If they don't get accepted no skin off my back, I'll just keep looking at homes and foreclosures and saving up more money for my down payment. Eventually I'll find a good deal and a home I like. I'm in a situation where I don't pay too high a rent and pay on a month to month basis so when it's time to strike I'll be ready....
Another issue I should have included to keep an eye on is unemployment. People without jobs don't make house payments or buy houses. And Unemployment compensation certainly doesn't pay enough to cover the payment and utilities on the majority of homes that were sold during the boom.

With a headline unemployment number at nearly 10% and an actual number probably close to double that amount, there isn't going to be any shortage of foreclosures to buy. Just the other week, the BLS found 900,000 unemployed people they forgot to count...

Good luck to you. It sounds like you've got a good grasp about the things going on and the market.
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Old 11-05-2009, 08:22 AM
 
Location: Bernanke's Financial Laboratory
513 posts, read 1,220,724 times
Reputation: 225
Quote:
Originally Posted by danny01 View Post
Yeah I told my agent from the start I wouldn't rush to take advantage of the tax credit. The thousands of dollars is nice but the reality is it's not worth it if it costs you tens of thousands rushing to buy a home.

Interesting point, I never thought of that with the interest rates to home price.

Yeah from what I've heard there are a lot of foreclosures in the pipeline. I don't want to buy too soon, but I feel like if I can find a deal now, then I'm ready to buy.

Thanks for your advice, think I'll go with low ball offers and try to get a good deal. If they don't get accepted no skin off my back, I'll just keep looking at homes and foreclosures and saving up more money for my down payment. Eventually I'll find a good deal and a home I like. I'm in a situation where I don't pay too high a rent and pay on a month to month basis so when it's time to strike I'll be ready....
From the FED statement yesterday:

"To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. The amount of agency debt purchases, while somewhat less than the previously announced maximum of $200 billion, is consistent with the recent path of purchases and reflects the limited availability of agency debt."

"In order to promote a smooth transition in markets, the Committee will gradually slow the pace of its purchases of both agency debt and agency mortgage-backed securities and anticipates that these transactions will be executed by the end of the first quarter of 2010."

From Denninger:

"We bought it all. We're no longer part of the market, we are the market! We have no freaking clue how to exit from this, and we know that when we do rates will spike higher. Unfortunately we also know that if Fannie and Freddie continue to bleed red ink we will blow up instead of them by doing this, so in March we pinky-promise to stop, even though that will destroy what's left of the housing market."

"the FHA has been willing to write paper with their guarantee on loans with DTIs (debt-to-income) ratios exceeding 50%!"

The Warning Shot Fired Yesterday - The Market Ticker

The bottom is nowhere in sight...
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Old 11-05-2009, 09:01 AM
 
407 posts, read 1,261,105 times
Reputation: 221
Tax credit will be extended as well. And not to just 1st timers.
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Old 11-05-2009, 09:17 AM
 
Location: Bernanke's Financial Laboratory
513 posts, read 1,220,724 times
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And, you can rent your foreclosure back from Fannie Mae for far less than your original payment...

"The rent can't be more than 31 percent of their pretax income."

Fannie Mae to Rent out Homes Instead Foreclosing - ABC News
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Old 11-05-2009, 09:39 AM
 
407 posts, read 1,261,105 times
Reputation: 221
I think it is smart of Fannie Mae to rent them back. They can't sell them because no one in their right mind would by a forclosure, as is property, if they don't have to. Of course, I could never see why anyone would purchase a home built after about 1987 either and certainly not for the prices around here.
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