Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I'm a frustrated buyer. We have made 2 offers on houses that were priced 15-20K over the recent comps, price range in the low 200s. In both cases the sellers bought in 01 or 02, financed 100% of their mortgage, & did some fix-up. Now, they need to sell for a certain amount (I'm guessing), which is above the comps for the neighborhood, partly due to foreclosures & short sales. Trust me, I wish the comps justified the asking price, but cannot in good conscience over-pay for either of these houses. We also plan to stay in the home 6-8 years, although I know that can change with life. It is quite discouraging.
I'm a frustrated buyer. We have made 2 offers on houses that were priced 15-20K over the recent comps, price range in the low 200s. In both cases the sellers bought in 01 or 02, financed 100% of their mortgage, & did some fix-up. Now, they need to sell for a certain amount (I'm guessing), which is above the comps for the neighborhood, partly due to foreclosures & short sales. Trust me, I wish the comps justified the asking price, but cannot in good conscience over-pay for either of these houses. We also plan to stay in the home 6-8 years, although I know that can change with life. It is quite discouraging.
You have 2 choices: pay what the seller is willing to take or move on to another home. If you are including foreclosures and short sales in the comps for a normal resale you shouldn't. Comps should be apples to apples and foreclosures are oranges.
Interesting post about buyers getting real. It proves one thing: At the end of the day the home is worth what seller will accept and what someone is willing to pay.
Sometimes buyers will not buy because the down payment requirements are too high. We have gone from interest only loans 100% financing to now you have to put 20% down or 10% if you pay PMI.
Sometimes buyers will not buy because the down payment requirements are too high. We have gone from interest only loans 100% financing to now you have to put 20% down or 10% if you pay PMI.
I'm not sure how a return to normal lending standards is unreasonable. As we've seen from the wave of foreclosures from creative financing schemes over the past few years, if you can't afford 10-20% down on a 30 year fixed loan, there's a good chance that you couldn't afford the house in the first place. Sellers need to price their houses so their target market of buyers can pay for them, and without 0 down no doc loans, buyers are back to only being able to buy what they can afford. That's going to undo a lot of the price gains of the past 5 years, but that's how the market works.
I'm a frustrated buyer. We have made 2 offers on houses that were priced 15-20K over the recent comps, price range in the low 200s. In both cases the sellers bought in 01 or 02, financed 100% of their mortgage, & did some fix-up. Now, they need to sell for a certain amount (I'm guessing), which is above the comps for the neighborhood, partly due to foreclosures & short sales. Trust me, I wish the comps justified the asking price, but cannot in good conscience over-pay for either of these houses. We also plan to stay in the home 6-8 years, although I know that can change with life. It is quite discouraging.
My advice would be to make offers on houses that are more appropriately priced. I think there are two main reasons why houses are listed too high: 1) The sellers are in denial and won't accept your offer until their house has been on the market for a year, or 2) The seller's mortgage amount is such that they can't sell for a lower price without bringing money to the table (which they probably don't have). If you are confident that comps support a price of X, then find a house that is closer to that and write up an offer. Otherwise be prepared to make a lot of offers until you happen across a seller who just woke up and realized his/her house is overpriced.
I think we should get away from the use of the word "bad" or "down" or other negative connotations.
So we should sugar coat it NAR style??
"Bad" is a bit of a loose term, but "down"? Of coarse markets can be described as "down" (ie volume is down, prices are down). Does the stock market only see "up" or "flat"...no down??
I would say my market here in the MPLS metro is down and bad.
You have 2 choices: pay what the seller is willing to take or move on to another home. If you are including foreclosures and short sales in the comps for a normal resale you shouldn't. Comps should be apples to apples and foreclosures are oranges.
Our agent has since removed the short sales/foreclosures from the comps.
We could pay what the sellers are asking, but the house would never appraise at the asking price. (a friend of mine selling her home is in this exact situation and her home is priced in line with the comps) And, we'd be buying the most expensive house in the neighborhood. Not to mention that this is not only the 2nd time this has come up. There are at least 3 other houses we like that are well over the comps so we have not offered, assuming that the seller will not take the offer and not wanting to waste anyone's time. All of them are relatively new on the market.
So, yes we move on to homes that are more closely valued to asking price. As new listings come out, I have yet to see one, so we wait and keep looking.
I'm not sure how a return to normal lending standards is unreasonable. As we've seen from the wave of foreclosures from creative financing schemes over the past few years, if you can't afford 10-20% down on a 30 year fixed loan, there's a good chance that you couldn't afford the house in the first place. Sellers need to price their houses so their target market of buyers can pay for them, and without 0 down no doc loans, buyers are back to only being able to buy what they can afford. That's going to undo a lot of the price gains of the past 5 years, but that's how the market works.
Amen to this. Irresponsible lending and borrowing were the "house of cards" that supported the runup in prices. I cannot tell you how many people I know with hh incomes in the 90k to 110 k range who bought 300k to 350k houses with no money down. Even with a traditional fixed-rate mortgage that is a recipe for problems.
I'm not sure how a return to normal lending standards is unreasonable. As we've seen from the wave of foreclosures from creative financing schemes over the past few years, if you can't afford 10-20% down on a 30 year fixed loan, there's a good chance that you couldn't afford the house in the first place. Sellers need to price their houses so their target market of buyers can pay for them, and without 0 down no doc loans, buyers are back to only being able to buy what they can afford. That's going to undo a lot of the price gains of the past 5 years, but that's how the market works.
We bought our first home with 3% down and PMI. Our combined salary was 55K for 200K home. We had no problems because we kept some money in savings for emergencies. Actually a week before closing we got a call from the lender to verify that we had enough money for 2 mortgage payments. That to me was responsible lending.
We bought our first home with 3% down and PMI. Our combined salary was 55K for 200K home. We had no problems because we kept some money in savings for emergencies. Actually a week before closing we got a call from the lender to verify that we had enough money for 2 mortgage payments. That to me was responsible lending.
Wow. I guess everyone has their own idea of house-poor, but that ratio would be it for me.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
