Buyers market.... really? (Phoenix, Mesa, Chandler: 2010, school district, to live)

[MotleyCrew]

Originally Posted by CheyDee

We closed on our first home in 1988 and was happy to get a 2 year adjustable ARM starting at 12%, with a rate cap of 18%, after putting 20% down. That means we EXPECTED the ARM to go up 2% every two years and expected to pay the increased rate. Back then we prayed that fixed rates would drop down to 10% at some point, so we could refinance - hopefully before the ARM adjusted up to 18%. Had one of us lost our job, the other would have had to work two of them and the jobless one would have taken whatever they could get, even if it was sweeping at a fast food chain; it would have never occurred to us to just walk away either.

I remember when rates finally dropped back down to 11% and we quickly refinanced. When they dropped to 9% we almost cried. Boy I can't imagine having had an ARM with a reset at 18% then, can you imagine one today?
Even though our work has all but dried up with the credit crunch, things are not as bad as they were in the early 80's.

[UKFSChick]

Originally Posted by azjack

As for the housing act, raise your hand if you want to be in debt $7,500 to the IRS in order to buy a house. I'll pass. Yep, it is a tax credit that you must repay, also known as a loan.

It's an interest-free loan, which is far more attractive than an 80/20 zero-down nightmare, wouldn't you say?

[CheyDee]

Originally Posted by MotleyCrew

I remember when rates finally dropped back down to 11% and we quickly refinanced. When they dropped to 9% we almost cried. Boy I can't imagine having had an ARM with a reset at 18% then, can you imagine one today?
Even though our work has all but dried up with the credit crunch, things are not as bad as they were in the early 80's.

Since we were young professionals we had hoped our annual salary increases would help cover the rising interest rate, since it would have taken six years of increases before hitting that 18%. As it turned out we never did refinance that house. It was tied into the 11th District Cost of Funds. By some miracle those rates kept going down so our rates steadily adjusted downwards, until we sold the house 10 years later.

Since everything in this world seems to increase and not decrease, when I see rates the way they are now, I just think "sheesh". And yes, there are still houses to be had for what we originally paid for ours back in 1988, although not in the same area we bought in at that time. It's now two decades later and people can have payments on their starter house for less than we paid on ours.

[azjack]

"It's an interest-free loan, which is far more attractive than an 80/20 zero-down nightmare, wouldn't you say?"

You put the words "$7500 tax credit for first-time buyers" in bold. It is a loan.

You present a false choice when referencing IRS loans versus suicide loans.

Regardless, borrowing money to finance a declining asset like an Arizona house is a huge mistake. In these shaky economic times, one needs flexibility. Being tied down to a house that is sinking in value limits your options.

And owing thousands of dollars to the IRS seems an especially shaky path to financial security.

[blueeyz911]

Originally Posted by YAZ

We're all still a little better off than our parents ifya think about it.

Back in the late 70's - early 80's folks were financing homes at 18%.

Yes we are. In 1981, my parents bought our first house in AZ and the interest rate was 12% and the house was $60,000. So their mortgage payment was only $100 or so less than mine is and I paid almost double for my house.

[moughie]

Question for real estate professionals:
We are in the 10 day inspection period following an offer on a Tempe home and have put forth a list of our" demands" The sellers have 5 days to respond, correct? Eihter repair or make an allowance.

At what point are we allowed to back out? Once we get their response and are not satisfied? Or is there some other time?

Thanks!

[shelly85]

One thing we learned last night is a lot of banks are immediately declining any offers that have the down payment assistance requested. We've put in close to 10 offers now and haven't gotten a single one and this is the reason we were told. That's just shady I think since most of the offers happened before the bill was passed. Sorry if someone might of posted this before

[markas214]

Originally Posted by shelly85

One thing we learned last night is a lot of banks are immediately declining any offers that have the down payment assistance requested. We've put in close to 10 offers now and haven't gotten a single one and this is the reason we were told. That's just shady I think since most of the offers happened before the bill was passed. Sorry if someone might of posted this before

They were heading that way without the legislation. Higher risk of default.

[Captain Bill]

Quote:
Originally Posted by shelly85
One thing we learned last night is a lot of banks are immediately declining any offers that have the down payment assistance requested. We've put in close to 10 offers now and haven't gotten a single one and this is the reason we were told. That's just shady I think since most of the offers happened before the bill was passed. Sorry if someone might of posted this before

Originally Posted by markas214

They were heading that way without the legislation. Higher risk of default.

Markas I believe you are speaking of the loans from banks, and Shelly is speaking of banks refusing offers on the house.

Shelly, there is nothing shady about a bank refusing an offer because of a buyer wanting closing assistance. A seller, whether it is a bank selling a home, or an individual, can refuse or accept any offer they choose.

All banks, and all asset managers within the REO department are different. They will accept different things in the offers. If you've made 10 offers on REO's and have lost them all, it may be that your offer price is lower than they want to accept, along with the other things you may be asking for.

The asset managers handle many properties, and the easier you make their job, the better chance you have of getting your offer through.

[Captain Bill]

Originally Posted by moughie

Question for real estate professionals:
We are in the 10 day inspection period following an offer on a Tempe home and have put forth a list of our" demands" The sellers have 5 days to respond, correct? Eihter repair or make an allowance.

At what point are we allowed to back out? Once we get their response and are not satisfied? Or is there some other time?

Thanks!

Your agent should have explained this to you when you signed the contract. It is now the agents job to guide you through the escrow process. Contracts are different in every state, so your agent is the best person to answer this question.

If you don't have an agent then you should contact a real estate attorney and ask that question.