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Except for VA mortgages. At one time you didn't even need to be approved but those laws have changed. I know because we bought a VA assumable house in 1985.
Ah, the good old days! Assumed a no-qualify VA mortgage in 1978 and a no-qualify FHA in 1989. $45 transfer fee each time.
Actually, no one does. Any person can sell their own house if they choose to. They can also use brokers who charge less or they can negotiate a lower percentage or some other fixed rate.
you are absolutely correct. There is nothing resembling a requirement or collusion for any homeowner to sell their home themselves without any real estate agent involved. And, the fee to hire an agent to sell the home is absolutely negotiable.
Now, in this particular case, I would point out that success in selling is either luck or skill. If you've never sold before, and honestly sold multiple times and within the last decade, your skill is not going to get you by on the open market (obviously selling to a friend or other known person is different). So, you can certainly get lucky, and good on you if you do.
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Now, in a fair system the seller would negotiate a fee for the selling agent to list and show the home and buyer would hire their own buyer's agent, usually for some flat rate, just to help out with the paperwork and going through the process. For the amount of actual work, time, effort, gas, etc. that goes into selling a house no agent should realistically command more than 2-2.5k.
It *sounds like* you're saying neither agent "earns" more than $2K-$2.5K per home. Is that correct? Is there some hourly wage that you break that down to?
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Now, in an even more fair system both parties would just show up to the office of the Clerk of the County Court (or Registrar's office or whatever you happen to call it in your area), write a check, and exchange over the deed. The seller would then pay off any remaining part of their mortgage and the buyer would already have theirs set up ready to take over the house. Done.
sorry, now you're asking for luck. how does the Buyer ensure the Seller pays off that mortgage? How do they know the property characteristics haven't changed - making the Seller's original Deed void? How does the Seller know the check the Buyer wrote them will be honored? And are all of these Buyers paying cash, or getting financing (about a 20/80 split)?
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We need a complete overhaul that doesn't gouge consumers and gets rid of this antiquated system full of middlemen and shysters.
can you name one system of financial exchange in America that doesn't have its' share of shysters? What if either the Buyer or Seller above is a shyster ... and so the "real estate exchange system" we have has been built to protect the innocent party?
I haven't seen a prepayment penalty in years, and most of them have a declining % that don't last past 4 or 5 years.
Was this a long ago conversation with your accountant? Do you have a copy of your closing documents, particularly your HUD/CD and your Promissory Note? Any prepayment penalty is spelled out clearly there.
So we have a 30 year fixed mortgage and put down 20% and make a monthly mortgage payment. If we decide to sell our house when someone buys it do we get our down payment back and they just take over our payments? Sorry this sounds like a stupid question but we’re first time homeowners and debating moving so I’m just not sure how this works.
You get back whatever you get back
Say your house was bought for 100,000 and you put 20,000 down. You owe 80,000.
Now your house appreciated and you sold it for 200,000. You will get
200,000 dollars
From that you subtract
Any money you are required to pay as the part of the sale. Say $5000
Commission to realtor who sold the house say 10,000
And 80,000 the outstanding loan you owe
Any money you agreed to use to help the buyer in the contract. Say you agreed to give the buyer $5000 towards repairs of the house or closing costs to help with the loan.
So you have 20,000 dollars in associated costs. You subtract 20,000 and 80,000rom the 200,000 which gives you 100,000 dollars. That 100,000 dollars is YOURS.
I’m oversimplified in the amounts but I’m just using the numbers as example
Thanks. So basically the longer I own the house and the longer I continue to make payments, if I do sell in the future I can expect a larger return because I’ll owe less to the bank.
Yes, but typically mortgages are front loaded with interest so very little of your payment is applied to the principal.
What one hopes for is that $330K house you bought appreciates to say $375K. If it has not appreciated (meaning a higher selling price), you could end up losing money on the deal.
Mortgage es are not front loaded at all . Your charged the same percentage on the balance all the way through .
You owe more early on so of course you pay more in interest but it is no greater percentage
I think the reason you pay more interest at first is because as the balance goes down on what you owe you pay less interest amount on it.
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