Help with intial offers on home? (sales, foreclosure, insurance)

[Dreamy46]

Originally Posted by beilart

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.

Why are you so down on foreclosures? I completely agree some have serious issues. On the other hand, I've seen some that were absolutely perfect such as custom homes and even the homes of builders that went under.

The investors are even flipping foreclosure, some of them for 25% to 100% profits in this down market.

Which opens up the question: should a first time homebuyer, aka someone starting out or rebuilding their lives, buy something cheap and get some sweat equity? Or, should they buy that same house at full or even an inflated price from an investor, and most likely have negative equity from the get go?

Isn't your home for sale? How's that coming along?

[beilart]

Originally Posted by Dreamy46

Why are you so down on foreclosures? I completely agree some have serious issues. On the other hand, I've seen some that were absolutely perfect such as custom homes and even the homes of builders that went under.

The investors are even flipping foreclosure, some of them for 25% to 100% profits in this down market.

Which opens up the question: should a first time homebuyer, aka someone starting out or rebuilding their lives, buy something cheap and get some sweat equity? Or, should they buy that same house at full or even an inflated price from an investor, and most likely have negative equity from the get go?

Isn't your home for sale? How's that coming along?

I am not "down on forclosures." I just think they are a bad way to go if you don't have to. What may look lovely at first glance is not always the case when you start checking for things you can't see on the surface. If you pay 250k for a home that has been forclosed on, maybe you get a good deal but what will you do if you have to put in another 50K in repairs that you didn't know where there. Why not spend 300K on a home that is move in ready in the first place. I can give you a prime example of this exact thing. This guy just bought a condo around here for 145K. He thought it was a good deal for a forclosure. Unfortunately, he missed some things on inspection and has had to put almost 90K into the home just so he can rent it out. Bad move all the way around because now the home is not worth what he has into it. He couldn't see that the prior owners had had a sever washer leak and the floor all the way to the concrete foundation was rotted. People should by what they can afford and then plan for every possible scenairo on top of that...ie job loss, health conditions. We have had about 4 lowball offers on our condo and turned them all down. We are priced about 10K under market value and dead on with the comps and we are in no hurry to sell as it is paid for and we already own our retirement home elsewhere so we can move anytime when we get ready.

[Dreamy46]

Originally Posted by beilart

I am not "down on forclosures." I just think they are a bad way to go if you don't have to. What may look lovely at first glance is not always the case when you start checking for things you can't see on the surface. If you pay 250k for a home that has been forclosed on, maybe you get a good deal but what will you do if you have to put in another 50K in repairs that you didn't know where there. Why not spend 300K on a home that is move in ready in the first place. I can give you a prime example of this exact thing. This guy just bought a condo around here for 145K. He thought it was a good deal for a forclosure. Unfortunately, he missed some things on inspection and has had to put almost 90K into the home just so he can rent it out. Bad move all the way around because now the home is not worth what he has into it. He couldn't see that the prior owners had had a sever washer leak and the floor all the way to the concrete foundation was rotted. People should by what they can afford and then plan for every possible scenairo on top of that...ie job loss, health conditions. We have had about 4 lowball offers on our condo and turned them all down. We are priced about 10K under market value and dead on with the comps and we are in no hurry to sell as it is paid for and we already own our retirement home elsewhere so we can move anytime when we get ready.

Sounds like he had a really crappy home inspector. And, if he was smart he would have at least tried to call the prior owner to get a rundown on what was wrong with the property. That's an unbelievably severe defect for everyone to miss it.

I'm not a condo fan to begin with. Too many issues of special assessments and problems with people not paying their HOA dues, which then get paid by the other owners. Plus a lot of them have community parking lots in which your car gets beat up like it does in apartment or store parking lots.

Good luck with your sale.

[beilart]

Well, I have been through several home inspections and I have yet to see one tear up the carpet to look at the floor beneath. I am not a fan of condos either but they are for the most part cheap living and least for a few years until one can gain equity to upgrade. They are also perfect for retirees and single people with careers. HOA dues are a hassle but ours does include all the water, sewer, gas, trash collection and lawn care so I can't complain too much.

[Dreamy46]

Originally Posted by beilart

Well, I have been through several home inspections and I have yet to see one tear up the carpet to look at the floor beneath. I am not a fan of condos either but they are for the most part cheap living and least for a few years until one can gain equity to upgrade. They are also perfect for retirees and single people with careers. HOA dues are a hassle but ours does include all the water, sewer, gas, trash collection and lawn care so I can't complain too much.

Condos also fall the worst in value during downturns as well.

And have all kinds of headache restrictions that lenders can put on them.

New FHA Rules Make Life Tough For Condo Sellers | Square Feet Commercial Real Estate Blog

[beilart]

The one across the commons just sold FHA so we are okay. Most people around here do not go FHA because these condos sell for under 200K and it isn't all that difficult to come up with 10-20% down payment so you can go a convential loan. Many retirees just pay cash for them if they have downsized.

[Nonna2trips]

With all this talk about foreclosures, short sales, etc., I know that it is currently a big buyer's market. Does anyone have any hope that this will turn around a bit in 2010 or 2011 with BRAC coming in the area. My dau. and SIL bought in the Broadneck Peninsula in 2004 when they had 2 incomes and no children. Now they have one income and 3 children and their TH is worth about 30K less than they paid for it. They have outgrown their home but are hoping to at least break even with a sale in 1 or 2 years. Are they dreaming?

[beilart]

I honestly think that most of the BRAC people will rent as opposed to buying at least for a while. You are never going to see home values what they were 3 years ago but at least the prices are becoming more realistic. Maryland has not been hit as bad as other parts of the country and especially not in Annapolis where houses will always be high no matter what. I see a buyers market for at least 3 more years but I don't see many houses coming down in price. In fact, I have seen some price increases around here. I am also seeing 7-900K homes being sold still. I also see interest rates going up by the first part of the year or so. A couple of years and they will probably be able to sell if they have some equity but it will never be worth what it was when they bought it for quite some time.

[Nonna2trips]

Thanks for the info beilart. And since they did 100% financing that would be a no to equity. I may encourage them to try to rent it for a year or two instead of selling or trying a short sale.

[Dreamy46]

"Moody's Economy.com estimates the number of underwater borrowers will peak at 17.4 million in the third quarter of 2010."

"An even higher estimate comes from Deutsche Bank, which predicted in an August study that the number of homeowners underwater will grow from 14 million (or 27% of all homeowners with mortgages) in 2009 to 25 million homeowners, or 48% of all those with a mortgage, by the time home prices stabilize."

More walk away from homes, mortgages - USATODAY.com