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Old 08-09-2007, 05:20 PM
 
155 posts, read 920,956 times
Reputation: 147

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My cousin just purchased a home in venice fl a Lennar home in the stoney brook compex off center road, which she told me the sales person told her and her husband that the homes were going for 300K brand new and that he sold them an existing home which someone forclosed on for 225K. She thinks they got a great deal, but they were able to get this house for this price without employment as they just moved from NJ and neither one of them has jobs, but great credit and 200K in 401K that is it. The monthy payment is about 1700/month holy sheets. How does this happen can anyone explain, i they are nuts doing this without jobs. And she thinks since the houses are going for 300K that they have 75K in instant equity if they were to sell next month, how true is this ?
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Old 08-09-2007, 05:32 PM
 
Location: Living in Paradise
5,702 posts, read 21,186,994 times
Reputation: 2947
Quote:
Originally Posted by JunoAqua View Post
My cousin just purchased a home in venice fl a Lennar home in the stoney brook compex off center road, which she told me the sales person told her and her husband that the homes were going for 300K brand new and that he sold them an existing home which someone forclosed on for 225K. She thinks they got a great deal, but they were able to get this house for this price without employment as they just moved from NJ and neither one of them has jobs, but great credit and 200K in 401K that is it. The monthy payment is about 1700/month holy sheets. How does this happen can anyone explain, i they are nuts doing this without jobs. And she thinks since the houses are going for 300K that they have 75K in instant equity if they were to sell next month, how true is this ?
No way, read the news....

Wall Street's deepening fears about a spreading credit crunch sent stocks plunging again Thursday, with the Dow Jones industrials extending their series of triple-digit swings and falling more than 380 points. The catalyst for the market's latest skid: a French bank's announcement that it was freezing three funds that invested in U.S. subprime mortgages.

The announcement by BNP Paribas raised the specter of a widening impact of U.S. credit market problems. The idea that anyone -- institutions, investors, companies, individuals -- can't get money when they need it unnerved a stock market that has suffered through weeks of volatility triggered by concerns about tight credit and bad subprime mortgages.
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Old 08-09-2007, 05:34 PM
 
Location: Jax
8,204 posts, read 30,321,606 times
Reputation: 3352
Sounds like the did a No Doc Loan (no documents).

If your credit is top notch, you can qualify for a loan based on credit score alone.

There are times when this is a smart move. I know someone who just did a no doc loan because their salary would not have been high enough to qualify, but their credit score was super-high.

The $75k in equity is not correct though. Lennar did not sell them a $300k house, they sold them a $225k house. If the house was worth $300k, Lennar would have sold it for $300k. I'd venture to say the house is only worth the $225k they paid for it .
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Old 08-09-2007, 06:30 PM
 
2,313 posts, read 1,960,591 times
Reputation: 471
Quote:
Originally Posted by JunoAqua View Post
My cousin just purchased a home in venice fl a Lennar home in the stoney brook compex off center road, which she told me the sales person told her and her husband that the homes were going for 300K brand new and that he sold them an existing home which someone forclosed on for 225K. She thinks they got a great deal, but they were able to get this house for this price without employment as they just moved from NJ and neither one of them has jobs, but great credit and 200K in 401K that is it. The monthy payment is about 1700/month holy sheets. How does this happen can anyone explain, i they are nuts doing this without jobs. And she thinks since the houses are going for 300K that they have 75K in instant equity if they were to sell next month, how true is this ?
Let them try to spend that instant equity or flip for the $75000.
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Old 08-09-2007, 07:19 PM
 
Location: HP/Eagle Rock
330 posts, read 1,133,020 times
Reputation: 137
That is a nice subdivision, but the residents have NOT been happy with Lennar.

'For Sale' signs pepper Stoneybrook

Residents balk at new developer fees
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Old 08-09-2007, 07:26 PM
 
458 posts, read 365,899 times
Reputation: 136
Wow, I see the uninformed are still being taken advantage of.

1. The house is not worth $300,000...I doubt it is worth $225,000.

2. It will be worth less than $225,000 a year from now. Since the median income in Venice is about $40,000, I would guess that house will be worth about $150,000 or so eventually.

3. No one should be buying a $225,000 house if their income is less than $70,000.

4. That salesperson is a total creep.

So whats the deal...how many people are going to have to be destroyed and how many news stories will have to be told about this bubble before people quit making it worse and worse???
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Old 08-09-2007, 07:37 PM
 
Location: Florida
2,209 posts, read 6,517,015 times
Reputation: 591
Post a picture of the house or an exact description of what they bought.

Sounds like they wanted to live here/fla/there, have the money in the bank to cover the place no problemo, have good credit, hence they can possibly get a multi year adjustible rate morgage for 2% ( if there such a thing? ) while keeping the money in a retirement account probably getting at least 5 1/2 or more per year. Less the 2% adj rate mrgage, they're ahead a few percent a year, net. Assuming there's no pre-penalty clause, then they're in the drivers seat with the sold exception of where the price ends up. You haven't been specific about what they are getting for that and how you can base a conclusion on value. How do you determine that value?

Looks like these people do pretty well for themselves. What gives you the credibility or right to call someone "nuts" ?

The instant equity is B/S. That's just wrong for a salesperson to lie like that. What a dirtbag. But let's hear about the house.
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Old 08-09-2007, 08:23 PM
 
458 posts, read 365,899 times
Reputation: 136
Come on Mr. TUdo...you are a smart guy.

1. Venice is a community of retirees and moderate income folks. The median income is less than $40,000.

2. There is nothing about Venice to support housing prices of $225,000 and up.

3. These people have no jobs and bought a house with a $1700 mortgage....how about utilities...and food...and gas...and maintenance...and all the other expenses? Where will the money come from to pay their $2500 or so in total monthly expenses with no jobs???

4. all they have is a 401k....that is for retirement. How will they pay their expenses? Rob their 401k and pay tax penalties?

5. That Stoneybrook development is full of houses for sale and rent, the values will come down and down.

That scenario is a total disaster. They thought they would buy a house for $225,000 and flip it for $300,000 right away. That is why they bought with no jobs. They did no research or they would have run like heck from that deal.

They will lose all their 401ks by the time they realize the house is not worth the money, then try to find jobs in a tough market, then try to sell at a loss.

This is a classic financial disaster. They will either spend all their 401ks or let the bank have the house back...just another foreclosure among thousands and thousands.
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Old 08-10-2007, 09:53 AM
 
Location: Jax
8,204 posts, read 30,321,606 times
Reputation: 3352
Quote:
Originally Posted by MrTudo View Post
hence they can possibly get a multi year adjustible rate morgage for 2% ( if there such a thing? ) while keeping the money in a retirement account probably getting at least 5 1/2 or more per year. Less the 2% adj rate mrgage, they're ahead a few percent a year, net.
The ARMS that advertise the starting rate at 2% usually have their first adjustment period after 30 or 60 days. So you only have that 2% for a month or two, not a year .
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Old 08-10-2007, 10:02 AM
 
Location: Jax
8,204 posts, read 30,321,606 times
Reputation: 3352
Quote:
Originally Posted by JimKing View Post
Wow, I see the uninformed are still being taken advantage of.
I don't agree with that. They are adults, they have no one to blame but themselves.

Buying a home is a multi-step process, there are countless opportunities to turn away from the purchase.

The banks are in the business of lending money. They can't lend money to you unless you are willing to take it .
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