Buying again, 2 years after Short Sale – questions for you pros

[sdrealtor]

[quote=SellingMyHome][quote=sdrealtor]once more I ask….Really? Did anyone read that? Really????[/quote]

Lol, it is a bit much… I sense some strong feelings are prompting the diatribes.[/quote]

A bit much? LOL Its unreadable

[bearishgurl]

Of course, these comments are “instigated” by sdr, who makes his primary living from the closing of successful “short sales,” lol.

I don’t believe in short sales. I believe a property owner who doesn’t want to pay his/her mtg anymore should just default and take the foreclosure hit on his/her credit report. And lenders “should” foreclose promptly, sparing the rest of us from all the “languishing” of potential depressed shadow inventory out there.

I have and will always maintain that a lender loses far less money if they commence foreclosure proceedings in a timely manner, which is typically what happened BEFORE 2003. The crooked agents handling “short sales” are the ones who are profiting from them and causing (in collusion with greedy sellers who don’t deserve anything) the closing prices of these properties to plummet (on the record) whilst at the same time their undeserving client often miraculously walks away from the sale with even MORE cash in their pockets.

Go figure. It’s par for the course ….

[patientrenter]

[quote=bearishgurl] ….The crooked agents handling “short sales” are the ones who are profiting from them and causing (in collusion with greedy sellers who don’t deserve anything) the closing prices of these properties to plummet (on the record) whilst at the same time their undeserving client often miraculously walks away from the sale with even MORE cash in their pockets.

Go figure. It’s par for the course ….[/quote]

I am sure there are some honest agents, honest sellers, and mortgage servicers. How many? Well, not 100%. The US is neither the most corrupt country in the world, nor the most pristine. We’ve probably come down a few rungs since Greenspan and then Bernanke decided to pump in enough money to cover all the normal consequences of large-scale financial shenanigans.

[sdrealtor]

All crooked? No. But at least that last post was less than 10,000 words and readable. No one cares what you think.

BTW, 40% of my real estate sales income this year was from short sales and I generate income from a few other endeavors outside of being a realtor so its not close to my primary source of income.

[bearishgurl]

[quote=sdrealtor] . . . No one cares what you think. . . [/quote]

Well, YOU seem to care, sdr, the way you routinely troll on in behind me and attempt to discredit me in one sentence (rife with misspellings and grammatical errors). At least my posts have some “substance.” Yours usually don’t say too much except to inexplicably reveal that you currently have a glass in your hand . . . and a corkscrew lying about nearby . . . is there something else we should expect? ;=}

[sdrealtor]

Your posts are unavoidable to those of us on this blog. They are overblown, misinformed and unreadable. If they have substance, no one knows because you are incapable of malking a point in 4 or 5 sentences. See I just did.

[bearishgurl]

[quote=sdrealtor] . . . See I just did.[/quote]

LOL, WHERE??

[sdrealtor]

Awesome post BG! It took me 3 sentences to show you were clueless and you followed up by handling the task in only 2 words! Bravo!

[SellingMyHome]

[quote=sdrealtor]Awesome post BG! It took me 3 sentences to show you were clueless and you followed up by handling the task in only 2 words! Bravo![/quote]

HEY! KNOCK IT OFF!

You all need to get back to telling me how I, and others like me, ruined the market. Then go back and show me exactly where I erred, taking the time to show me in finite detail where I erred at each step in the process. Then ask me why I didn’t sell my house at the top of the market, because everyone knew when the top was, right?

[bearishgurl]

[quote=SellingMyHome] . . . You all need to get back to telling me how I, and others like me, ruined the market. Then go back and show me exactly where I erred, taking the time to show me in finite detail where I erred at each step in the process. Then ask me why I didn’t sell my house at the top of the market, because everyone knew when the top was, right?[/quote]

SMH, that was another intent of my long post . . . to show you, and others like you, in finite detail, where you erred in each step of the process. Maybe you knew where some of your errors were and maybe you didn’t.

I also attribute a good portion of the blame to your incompetent (and/or self-serving) agent, who placed an offer for you (and got it accepted) on the property for far more money than it was worth. As a first-time buyer, a truly competent agent with integrity is sometimes hard to find if you don’t have any experience as a RE principal and don’t have excellent referrals given to you.

“Everyone” did not exactly know where the top of the market was, but when a 60 yo 1700 sf dry-rotted house with old windows and a wall furnace down my street sold to a landscaper and hotel maid for $590K, even my neighbors with zero RE education or experience could see that something was up. How was this couple able to spend that much for a house?? There were clues all around everyone who was not living in large apartment communities, rural areas and/or oblivious to their surroundings.

If you don’t understand where you went wrong, how are you going to avoid the same mistake again?

I hope I was able to shed some light on what happened in your case, even if the numbers were a little off :=]

Pay no mind to sdr’s antics. Instead of contributing anything useful, he unfortunately chooses to play this petty game here. The Piggs have long ago tired of it.

[SellingMyHome]

[quote=bearishgurl]

SMH, that was another intent of my long post . . . to show you, and others like you, in finite detail, where you erred in each step of the process. Maybe you knew where some of your errors were and maybe you didn’t.
[/quote]

And I’m sure others will appreciate it. But, when you pasted in two tables of 30 years of payments, you lost your audience. Presentation is key, and finite detail killed your presentation…

Thanks again for spending time to discuss the issues. What I’m really looking forward to is learning how to do things right in the future, if it’s continuing to rent forever, or spending the proper time researching before buying…

[bearishgurl]

[quote=SellingMyHome][quote=bearishgurl]

SMH, that was another intent of my long post . . . to show you, and others like you, in finite detail, where you erred in each step of the process. Maybe you knew where some of your errors were and maybe you didn’t.
[/quote]

And I’m sure others will appreciate it. But, when you pasted in two tables of 30 years of payments, you lost your audience. Presentation is key, and finite detail killed your presentation…

Thanks again for spending time to discuss the issues. What I’m really looking forward to is learning how to do things right in the future, if it’s continuing to rent forever, or spending the proper time researching before buying…[/quote]

It was only 8 years of payments, SMH. You bailed in the 6th year, even though it was your intent to stay there =>10 years. I have actually never used amortization tables on this blog, but thought it would be useful for you to see how your purchase money loans would have amortized if you left them alone.

I have some suggestions for “doing things right in the future.”

1. Save up enough for at least a 20% downpayment + closing costs and at least a $10K “slush-fund” (for reserves and to buy a bag of fertilizer, etc after you move in). I don’t know how old you are, but if you have to quit feeding your retirement accts for awhile to do this, it might be worth it. I really feel that prices will hold fairly steady in the next 3 years, depending on area. Some areas which did not have much distress to begin with, may go up slightly. Your preferred area of Alpine has had a lot of distress and also suffered from a devastating fire in recent years so I don’t see the prices going up very fast there in the next 3 yrs, if at all. HOWEVER, the presence of a new, modern HS in Alpine could very well make it a more desirable destination for families, thus there could be an uptick in prices upon the school’s completion. GUHSD is currently spending a FORTUNE building that school and also rehabbing and expanding Granite Hills HS.

While tightening your belt and saving as much as you can:

-become intimately familiar with all of your desired areas by driving them repeatedly on different times and days and pulling plat maps of those streets or subdivisions from the assessors office. Find out what those owners are paying for fire ins coverage and also the exact amount of annual MR bonds (if applic) and HOA dues (if applic). Do not trust RE agents to tell you how much annual MR is. You need to research it yourself.

-If your desired area is custom semi-rural or rural, talk to some of the homeowners working outside and find out if their street is hooked up to sewer. If not and it is an older tract, find out where the septic tanks are located (front, side, back) and if the back yards are sloping up or down on either side of the st. Try to go to some open houses around there to see how the back yards lay and how far the leachfields are from the dwellings. Find out if well water is available. If it is and the pump is operable, this will save you a FORTUNE!

-Learn everything you can about the values in your desired area. If it is an older tract, learn what those properties were built as PRIOR to all the complete remodels and room additions you now see on the street. Comb thru recent solds online and find out why they sold for what they did (distress sale, custom woodwork, expensive outdoor hardscaping, etc).

-Do not buy on any dark residential streets surrounding Viejas casino, even if not the primary route to/from. They are routinely driven by drivers who may have had too much to drink and even may be temporarily “lost.”

-Run the hard monthly numbers on a “prime” or “Alt-A” mortgage with the assumption that your FICO score is at least 745 (and preferably higher). DO NOT buy with a 1st and 2nd TD purchase money! Buy ONLY with a 1st TD of 80% LTV or less and endeavor to get it with as low of an interest rate as possible without paying points.

-Comb your old settlement statements for all the points and junk fees you paid in the past and DO NOT continue on with the mtg process if your GFE has charges on it that were not discussed with you at the time of application. Perhaps more direct lenders will come back in the picture in the coming months/years which would eliminate “middlemen” and possibly lessen closing costs and fees.

-Most importantly, do NOT buy without knowing what that home will cost you monthly in total, incl all utilities. I would also suggest you stay away from 30/5’s, 30/7’s, I/O’s and ARMs and only agree to a fixed rate mtg as your current responsibilities are such that you need to have predictable housing expenses for many more years.

There is much more but you can start with the above. I wish you the best of luck, SMH!

[scaredyclassic]

While waiting and saving, start lifting weights.

[SellingMyHome]

[quote=bearishgurl][quote=SellingMyHome][quote=bearishgurl]

SMH, that was another intent of my long post . . . to show you, and others like you, in finite detail, where you erred in each step of the process. Maybe you knew where some of your errors were and maybe you didn’t.
[/quote]

And I’m sure others will appreciate it. But, when you pasted in two tables of 30 years of payments, you lost your audience. Presentation is key, and finite detail killed your presentation…

Thanks again for spending time to discuss the issues. What I’m really looking forward to is learning how to do things right in the future, if it’s continuing to rent forever, or spending the proper time researching before buying…[/quote]

It was only 8 years of payments, SMH. You bailed in the 6th year, even though it was your intent to stay there =>10 years. I have actually never used amortization tables on this blog, but thought it would be useful for you to see how your purchase money loans would have amortized if you left them alone.

I have some suggestions for “doing things right in the future.”

1. Save up enough for at least a 20% downpayment + closing costs and at least a $10K “slush-fund” (for reserves and to buy a bag of fertilizer, etc after you move in). I don’t know how old you are, but if you have to quit feeding your retirement accts for awhile to do this, it might be worth it. I really feel that prices will hold fairly steady in the next 3 years, depending on area. Some areas which did not have much distress to begin with, may go up slightly. Your preferred area of Alpine has had a lot of distress and also suffered from a devastating fire in recent years so I don’t see the prices going up very fast there in the next 3 yrs, if at all. HOWEVER, the presence of a new, modern HS in Alpine could very well make it a more desirable destination for families, thus there could be an uptick in prices upon the school’s completion. GUHSD is currently spending a FORTUNE building that school and also rehabbing and expanding Granite Hills HS.

While tightening your belt and saving as much as you can:

-become intimately familiar with all of your desired areas by driving them repeatedly on different times and days and pulling plat maps of those streets or subdivisions from the assessors office. Find out what those owners are paying for fire ins coverage and also the exact amount of annual MR bonds (if applic) and HOA dues (if applic). Do not trust RE agents to tell you how much annual MR is. You need to research it yourself.

-If your desired area is custom semi-rural or rural, talk to some of the homeowners working outside and find out if their street is hooked up to sewer. If not and it is an older tract, find out where the septic tanks are located (front, side, back) and if the back yards are sloping up or down on either side of the st. Try to go to some open houses around there to see how the back yards lay and how far the leachfields are from the dwellings. Find out if well water is available. If it is and the pump is operable, this will save you a FORTUNE!

-Learn everything you can about the values in your desired area. If it is an older tract, learn what those properties were built as PRIOR to all the complete remodels and room additions you now see on the street. Comb thru recent solds online and find out why they sold for what they did (distress sale, custom woodwork, expensive outdoor hardscaping, etc).

-Do not buy on any dark residential streets surrounding Viejas casino, even if not the primary route to/from. They are routinely driven by drivers who may have had too much to drink and even may be temporarily “lost.”

-Run the hard monthly numbers on a “prime” or “Alt-A” mortgage with the assumption that your FICO score is at least 745 (and preferably higher). DO NOT buy with a 1st and 2nd TD purchase money! Buy ONLY with a 1st TD of 80% LTV or less and endeavor to get it with as low of an interest rate as possible without paying points.

-Comb your old settlement statements for all the points and junk fees you paid in the past and DO NOT continue on with the mtg process if your GFE has charges on it that were not discussed with you at the time of application. Perhaps more direct lenders will come back in the picture in the coming months/years which would eliminate “middlemen” and possibly lessen closing costs and fees.

-Most importantly, do NOT buy without knowing what that home will cost you monthly in total, incl all utilities. I would also suggest you stay away from 30/5’s, 30/7’s, I/O’s and ARMs and only agree to a fixed rate mtg as your current responsibilities are such that you need to have predictable housing expenses for many more years.

There is much more but you can start with the above. I wish you the best of luck, SMH![/quote]

Why put 20% down? When I run the rent vs buy calculator at NYTimes, the higher deposit makes it better to rent, assuming a 6% or higher ROI, which long-term is doable.

Why not put the 3.5% down? The next house I buy will be my last, if nothing changes with jobs, health, etc. Aren’t interest rates so low now that it makes sense?

I know a lot of people here wish that folks never could have bought with zero or little down, as it allowed many people to walk away with no loss.

I’m really still a little (a lot in some of your eyes) clueless as to why a higher down payment is a better thing for me.

[bearishgurl]

[quote=SellingMyHome]Why put 20% down? When I run the rent vs buy calculator at NYTimes, the higher deposit makes it better to rent, assuming a 6% or higher ROI, which long-term is doable.

Why not put the 3.5% down? The next house I buy will be my last, if nothing changes with jobs, health, etc. Aren’t interest rates so low now that it makes sense?

I know a lot of people here wish that folks never could have bought with zero or little down, as it allowed many people to walk away with no loss.

I’m really still a little (a lot in some of your eyes) clueless as to why a higher down payment is a better thing for me.[/quote]

SMH, first, the Piggs would like to know which of your “investments” have been giving you a 6% annual return and for how long …

Submitted by SellingMyHome on November 20, 2009 – 12:17pm

. . .

My story [as it relates to my property sold short in 2010]:

. . .

Current mortgage and Property tax add up to $3,300/month. Total household income is about $120K, and I estimate we save about $900 month with the interest deductions, so would need to rent for less than $2,300 to make it work. We could easily find a place for less than that that suites our needs. . . .

Can we afford what we have? Yes, but with two kids under four, we have saved absolutley nothing in the last four years, and have actually been dipping further into our credit cards. I have a great pension at work, and wife contributes to her 401K. Sadly though, we have no savings in case of emergency…

(explanation added)

Reasons to put at least 20% down? We will use a $500K purchase in Alpine, CA, for our example here (1st pymt due 1/1/12):

FHA 96.5% mtg of $482,500 borrowed at 4% fixed for 30 yrs with 0 pts:

Monthly payment (P&I amts are for 1st pymt only and taxes are for 1st full tax bill):

P = $695.20
I = $1608.33
T = $487.50
I = $229.17
MMI = $221.14

Total mo pymt = $3241.34

In addition, your “required up front MMI” of $8750 is thrown to the wind and you don’t have it available after closing for a bag of fertiilizer, etc.

[snip amort table]

payoff amount after ten years is $380,132.60

(for the sake of brevity here, you’ll have to take my word for it, lol)

Conv 80% mtg of $400,000 borrowed at 4% fixed for 30 yrs with 0 pts:

Monthly payment (P&I amts are for 1st pymt only and taxes for for 1st full tax bill):

P = $576.33
I = $1333.33
T = $487.50
I = $229.17

Total mo pymt = $2626.33

A savings of $615.01 mo over FHA!

payoff amount after ten years is $315,135.84

By 1/1/22, you will owe $64,996.76 less with the conventional loan and will have saved $7380.12 in monthly housing costs.

Would the geek Piggs like to figure out the 10-yr return on SMH’s excess (downpayment) of $82,500 if he obtains a conventional loan v an FHA loan?

And, what’s an approx mtg payment savings of $615.01 worth to you, SMH? You stated in your post two years ago that your $3300 payment was too high for you without “dipping into cc’s” every month. Is that still the case?

edit: Of course, the payments above presuppose no MR or HOA dues.

[Author]

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