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August 24, 2011 at 9:53 PM #725072August 24, 2011 at 11:23 PM #723949
CA renter
Participant[quote=AN][quote=CA renter]The method of payment should not matter. There is no better comp than the very house, itself. Add the actual cost of materials used for the upgrades/improvements, plus a reasonable about for labor (@ ~$15/hr, on average), and that’s your price.[/quote]
Under the ideal condition, yes, the method of payment should not matter. But I’m sure you’re well aware that depending on the seller’s reason to sell the place, it definitely matter. recordsclerk described one scenario. Here are a few more: 1) a crack slab that requires a cash only offer (I’ve seen it go for ~$200k-250k below market value). Because it’s a cash only deal, the demand is VERY small. Which drives down price for that particular home (well below the market price – cost of fixing the slab). 2)A short sale. Sell don’t care what price it get sold for but they want to get out of the house, so they pick the buyer that’s most likely to be there when the deal goes through. I actually asked an appraiser this a few days ago and he did say he would add some $ amount if he uses a short sale as a comp, since SS normally sell for below market value. 3)Probate sale (I think you had personal experience with this), where the seller are out of state and they just want it SOLD. If a buyer comes in with all cash below the market value and other bids, I’m sure the seller would be incline to accept such offer. Obviously, it has to still be reasonable.You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]
Under normal circumstances, I’d agree with you about the cash offers, but that’s not the case in today’s market. There is an abundant supply of cash buyers out there, according to newspaper reports, realtors, and based on our own experience. It’s to the point that cash buyers cannot really get much of a discount.
In the transactions we were involved with, we didn’t care if it was a cash buyer or not, as long as they had 20% down; the final price was all that mattered…and that includes sales we made when the credit market was absolutely frozen. Now, it’s even easier.
August 24, 2011 at 11:23 PM #724036Participant[quote=AN][quote=CA renter]The method of payment should not matter. There is no better comp than the very house, itself. Add the actual cost of materials used for the upgrades/improvements, plus a reasonable about for labor (@ ~$15/hr, on average), and that’s your price.[/quote]
Under the ideal condition, yes, the method of payment should not matter. But I’m sure you’re well aware that depending on the seller’s reason to sell the place, it definitely matter. recordsclerk described one scenario. Here are a few more: 1) a crack slab that requires a cash only offer (I’ve seen it go for ~$200k-250k below market value). Because it’s a cash only deal, the demand is VERY small. Which drives down price for that particular home (well below the market price – cost of fixing the slab). 2)A short sale. Sell don’t care what price it get sold for but they want to get out of the house, so they pick the buyer that’s most likely to be there when the deal goes through. I actually asked an appraiser this a few days ago and he did say he would add some $ amount if he uses a short sale as a comp, since SS normally sell for below market value. 3)Probate sale (I think you had personal experience with this), where the seller are out of state and they just want it SOLD. If a buyer comes in with all cash below the market value and other bids, I’m sure the seller would be incline to accept such offer. Obviously, it has to still be reasonable.You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]
Under normal circumstances, I’d agree with you about the cash offers, but that’s not the case in today’s market. There is an abundant supply of cash buyers out there, according to newspaper reports, realtors, and based on our own experience. It’s to the point that cash buyers cannot really get much of a discount.
In the transactions we were involved with, we didn’t care if it was a cash buyer or not, as long as they had 20% down; the final price was all that mattered…and that includes sales we made when the credit market was absolutely frozen. Now, it’s even easier.
August 24, 2011 at 11:23 PM #724627Participant[quote=AN][quote=CA renter]The method of payment should not matter. There is no better comp than the very house, itself. Add the actual cost of materials used for the upgrades/improvements, plus a reasonable about for labor (@ ~$15/hr, on average), and that’s your price.[/quote]
Under the ideal condition, yes, the method of payment should not matter. But I’m sure you’re well aware that depending on the seller’s reason to sell the place, it definitely matter. recordsclerk described one scenario. Here are a few more: 1) a crack slab that requires a cash only offer (I’ve seen it go for ~$200k-250k below market value). Because it’s a cash only deal, the demand is VERY small. Which drives down price for that particular home (well below the market price – cost of fixing the slab). 2)A short sale. Sell don’t care what price it get sold for but they want to get out of the house, so they pick the buyer that’s most likely to be there when the deal goes through. I actually asked an appraiser this a few days ago and he did say he would add some $ amount if he uses a short sale as a comp, since SS normally sell for below market value. 3)Probate sale (I think you had personal experience with this), where the seller are out of state and they just want it SOLD. If a buyer comes in with all cash below the market value and other bids, I’m sure the seller would be incline to accept such offer. Obviously, it has to still be reasonable.You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]
Under normal circumstances, I’d agree with you about the cash offers, but that’s not the case in today’s market. There is an abundant supply of cash buyers out there, according to newspaper reports, realtors, and based on our own experience. It’s to the point that cash buyers cannot really get much of a discount.
In the transactions we were involved with, we didn’t care if it was a cash buyer or not, as long as they had 20% down; the final price was all that mattered…and that includes sales we made when the credit market was absolutely frozen. Now, it’s even easier.
August 24, 2011 at 11:23 PM #724781Participant[quote=AN][quote=CA renter]The method of payment should not matter. There is no better comp than the very house, itself. Add the actual cost of materials used for the upgrades/improvements, plus a reasonable about for labor (@ ~$15/hr, on average), and that’s your price.[/quote]
Under the ideal condition, yes, the method of payment should not matter. But I’m sure you’re well aware that depending on the seller’s reason to sell the place, it definitely matter. recordsclerk described one scenario. Here are a few more: 1) a crack slab that requires a cash only offer (I’ve seen it go for ~$200k-250k below market value). Because it’s a cash only deal, the demand is VERY small. Which drives down price for that particular home (well below the market price – cost of fixing the slab). 2)A short sale. Sell don’t care what price it get sold for but they want to get out of the house, so they pick the buyer that’s most likely to be there when the deal goes through. I actually asked an appraiser this a few days ago and he did say he would add some $ amount if he uses a short sale as a comp, since SS normally sell for below market value. 3)Probate sale (I think you had personal experience with this), where the seller are out of state and they just want it SOLD. If a buyer comes in with all cash below the market value and other bids, I’m sure the seller would be incline to accept such offer. Obviously, it has to still be reasonable.You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]
Under normal circumstances, I’d agree with you about the cash offers, but that’s not the case in today’s market. There is an abundant supply of cash buyers out there, according to newspaper reports, realtors, and based on our own experience. It’s to the point that cash buyers cannot really get much of a discount.
In the transactions we were involved with, we didn’t care if it was a cash buyer or not, as long as they had 20% down; the final price was all that mattered…and that includes sales we made when the credit market was absolutely frozen. Now, it’s even easier.
August 24, 2011 at 11:23 PM #725145Participant[quote=AN][quote=CA renter]The method of payment should not matter. There is no better comp than the very house, itself. Add the actual cost of materials used for the upgrades/improvements, plus a reasonable about for labor (@ ~$15/hr, on average), and that’s your price.[/quote]
Under the ideal condition, yes, the method of payment should not matter. But I’m sure you’re well aware that depending on the seller’s reason to sell the place, it definitely matter. recordsclerk described one scenario. Here are a few more: 1) a crack slab that requires a cash only offer (I’ve seen it go for ~$200k-250k below market value). Because it’s a cash only deal, the demand is VERY small. Which drives down price for that particular home (well below the market price – cost of fixing the slab). 2)A short sale. Sell don’t care what price it get sold for but they want to get out of the house, so they pick the buyer that’s most likely to be there when the deal goes through. I actually asked an appraiser this a few days ago and he did say he would add some $ amount if he uses a short sale as a comp, since SS normally sell for below market value. 3)Probate sale (I think you had personal experience with this), where the seller are out of state and they just want it SOLD. If a buyer comes in with all cash below the market value and other bids, I’m sure the seller would be incline to accept such offer. Obviously, it has to still be reasonable.You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]
Under normal circumstances, I’d agree with you about the cash offers, but that’s not the case in today’s market. There is an abundant supply of cash buyers out there, according to newspaper reports, realtors, and based on our own experience. It’s to the point that cash buyers cannot really get much of a discount.
In the transactions we were involved with, we didn’t care if it was a cash buyer or not, as long as they had 20% down; the final price was all that mattered…and that includes sales we made when the credit market was absolutely frozen. Now, it’s even easier.
August 25, 2011 at 1:19 AM #724024DomoArigato
Participant[quote=AN]
You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]Supply and demand has nothing to do with the housing market. This is because the government is currently backing 97% of all mortgages. Remove that support and then we could talk about supply and demand (at much lower prices).
Here’s what I suspect is really happening. The banks can’t afford to put any money into their housing inventory because they don’t have any real money. All they have is an inflated mark on their balance sheet for each house. They are willing to sell their inventory at whatever price they can get because the government/taxpayers will cover their loss.
So the banks have a bunch of houses that can’t pass inspection and which they don’t want to put any money into. The banks are willing to sell at close to the real market price (i.e., what the house would sell for without the massive amount of govt/taxpayer support) to all-cash buyers who don’t have to worry about inspections.
The all-cash buyers then fix up the house so that it can pass inspection and then flip it back to the government via an FHA borrower who puts 3.5% down. The process then starts all over again with 50% of FHA FBs getting foreclosed upon within two years and the house going back to a bank.
So what we have is some type of massive, circular Ponzi scheme financed by the government/taxpayers that looks something like this:
bank-owned–>all-cash-buyer–>govt-backed-FB–>foreclosed-back-to-bankThe idea that there is this pool of frivolous borrowers out there who are waiting for the perfectly fixed up house is poppycock. The fact is that the government-backed FBs can’t get through the paperwork/inspections fast enough to beat the all-cash buyer. Further, the banks don’t care what price they get as the taxpayers are covering their losses.
It’s a huge shit sandwich and we are all taking a bite through continuous, forced taxpayer-financed bank bailouts.
August 25, 2011 at 1:19 AM #724115Participant[quote=AN]
You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]Supply and demand has nothing to do with the housing market. This is because the government is currently backing 97% of all mortgages. Remove that support and then we could talk about supply and demand (at much lower prices).
Here’s what I suspect is really happening. The banks can’t afford to put any money into their housing inventory because they don’t have any real money. All they have is an inflated mark on their balance sheet for each house. They are willing to sell their inventory at whatever price they can get because the government/taxpayers will cover their loss.
So the banks have a bunch of houses that can’t pass inspection and which they don’t want to put any money into. The banks are willing to sell at close to the real market price (i.e., what the house would sell for without the massive amount of govt/taxpayer support) to all-cash buyers who don’t have to worry about inspections.
The all-cash buyers then fix up the house so that it can pass inspection and then flip it back to the government via an FHA borrower who puts 3.5% down. The process then starts all over again with 50% of FHA FBs getting foreclosed upon within two years and the house going back to a bank.
So what we have is some type of massive, circular Ponzi scheme financed by the government/taxpayers that looks something like this:
bank-owned–>all-cash-buyer–>govt-backed-FB–>foreclosed-back-to-bankThe idea that there is this pool of frivolous borrowers out there who are waiting for the perfectly fixed up house is poppycock. The fact is that the government-backed FBs can’t get through the paperwork/inspections fast enough to beat the all-cash buyer. Further, the banks don’t care what price they get as the taxpayers are covering their losses.
It’s a huge shit sandwich and we are all taking a bite through continuous, forced taxpayer-financed bank bailouts.
August 25, 2011 at 1:19 AM #724705Participant[quote=AN]
You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]Supply and demand has nothing to do with the housing market. This is because the government is currently backing 97% of all mortgages. Remove that support and then we could talk about supply and demand (at much lower prices).
Here’s what I suspect is really happening. The banks can’t afford to put any money into their housing inventory because they don’t have any real money. All they have is an inflated mark on their balance sheet for each house. They are willing to sell their inventory at whatever price they can get because the government/taxpayers will cover their loss.
So the banks have a bunch of houses that can’t pass inspection and which they don’t want to put any money into. The banks are willing to sell at close to the real market price (i.e., what the house would sell for without the massive amount of govt/taxpayer support) to all-cash buyers who don’t have to worry about inspections.
The all-cash buyers then fix up the house so that it can pass inspection and then flip it back to the government via an FHA borrower who puts 3.5% down. The process then starts all over again with 50% of FHA FBs getting foreclosed upon within two years and the house going back to a bank.
So what we have is some type of massive, circular Ponzi scheme financed by the government/taxpayers that looks something like this:
bank-owned–>all-cash-buyer–>govt-backed-FB–>foreclosed-back-to-bankThe idea that there is this pool of frivolous borrowers out there who are waiting for the perfectly fixed up house is poppycock. The fact is that the government-backed FBs can’t get through the paperwork/inspections fast enough to beat the all-cash buyer. Further, the banks don’t care what price they get as the taxpayers are covering their losses.
It’s a huge shit sandwich and we are all taking a bite through continuous, forced taxpayer-financed bank bailouts.
August 25, 2011 at 1:19 AM #724860Participant[quote=AN]
You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]Supply and demand has nothing to do with the housing market. This is because the government is currently backing 97% of all mortgages. Remove that support and then we could talk about supply and demand (at much lower prices).
Here’s what I suspect is really happening. The banks can’t afford to put any money into their housing inventory because they don’t have any real money. All they have is an inflated mark on their balance sheet for each house. They are willing to sell their inventory at whatever price they can get because the government/taxpayers will cover their loss.
So the banks have a bunch of houses that can’t pass inspection and which they don’t want to put any money into. The banks are willing to sell at close to the real market price (i.e., what the house would sell for without the massive amount of govt/taxpayer support) to all-cash buyers who don’t have to worry about inspections.
The all-cash buyers then fix up the house so that it can pass inspection and then flip it back to the government via an FHA borrower who puts 3.5% down. The process then starts all over again with 50% of FHA FBs getting foreclosed upon within two years and the house going back to a bank.
So what we have is some type of massive, circular Ponzi scheme financed by the government/taxpayers that looks something like this:
bank-owned–>all-cash-buyer–>govt-backed-FB–>foreclosed-back-to-bankThe idea that there is this pool of frivolous borrowers out there who are waiting for the perfectly fixed up house is poppycock. The fact is that the government-backed FBs can’t get through the paperwork/inspections fast enough to beat the all-cash buyer. Further, the banks don’t care what price they get as the taxpayers are covering their losses.
It’s a huge shit sandwich and we are all taking a bite through continuous, forced taxpayer-financed bank bailouts.
August 25, 2011 at 1:19 AM #725225Participant[quote=AN]
You fail to see that a move in ready house attracts a lot more buyers, which would drive up the price. So, it’s simply about supply and demand. Although it might be the exact same house, the condition is different, which would attract different amount of interests.[/quote]Supply and demand has nothing to do with the housing market. This is because the government is currently backing 97% of all mortgages. Remove that support and then we could talk about supply and demand (at much lower prices).
Here’s what I suspect is really happening. The banks can’t afford to put any money into their housing inventory because they don’t have any real money. All they have is an inflated mark on their balance sheet for each house. They are willing to sell their inventory at whatever price they can get because the government/taxpayers will cover their loss.
So the banks have a bunch of houses that can’t pass inspection and which they don’t want to put any money into. The banks are willing to sell at close to the real market price (i.e., what the house would sell for without the massive amount of govt/taxpayer support) to all-cash buyers who don’t have to worry about inspections.
The all-cash buyers then fix up the house so that it can pass inspection and then flip it back to the government via an FHA borrower who puts 3.5% down. The process then starts all over again with 50% of FHA FBs getting foreclosed upon within two years and the house going back to a bank.
So what we have is some type of massive, circular Ponzi scheme financed by the government/taxpayers that looks something like this:
bank-owned–>all-cash-buyer–>govt-backed-FB–>foreclosed-back-to-bankThe idea that there is this pool of frivolous borrowers out there who are waiting for the perfectly fixed up house is poppycock. The fact is that the government-backed FBs can’t get through the paperwork/inspections fast enough to beat the all-cash buyer. Further, the banks don’t care what price they get as the taxpayers are covering their losses.
It’s a huge shit sandwich and we are all taking a bite through continuous, forced taxpayer-financed bank bailouts.
August 25, 2011 at 1:29 AM #724028an
Participant[quote=CA renter]Under normal circumstances, I’d agree with you about the cash offers, but that’s not the case in today’s market. There is an abundant supply of cash buyers out there, according to newspaper reports, realtors, and based on our own experience. It’s to the point that cash buyers cannot really get much of a discount.[/quote]
That’s hard to believe since I’m seeing the opposite occurring. But I don’t have data to back up what I’m seeing, other than fixer closing MUCH lower than a comparable turn key home minus the cost of upgrades. I see that A LOT. But it’s anecdotal.[quote=CA renter]In the transactions we were involved with, we didn’t care if it was a cash buyer or not, as long as they had 20% down; the final price was all that mattered…and that includes sales we made when the credit market was absolutely frozen. Now, it’s even easier.[/quote]
Did you turn down a higher offer with less than 20% down? YouAugust 25, 2011 at 1:29 AM #724120Participant[quote=CA renter]Under normal circumstances, I’d agree with you about the cash offers, but that’s not the case in today’s market. There is an abundant supply of cash buyers out there, according to newspaper reports, realtors, and based on our own experience. It’s to the point that cash buyers cannot really get much of a discount.[/quote]
That’s hard to believe since I’m seeing the opposite occurring. But I don’t have data to back up what I’m seeing, other than fixer closing MUCH lower than a comparable turn key home minus the cost of upgrades. I see that A LOT. But it’s anecdotal.[quote=CA renter]In the transactions we were involved with, we didn’t care if it was a cash buyer or not, as long as they had 20% down; the final price was all that mattered…and that includes sales we made when the credit market was absolutely frozen. Now, it’s even easier.[/quote]
Did you turn down a higher offer with less than 20% down? YouAugust 25, 2011 at 1:29 AM #724710Participant[quote=CA renter]Under normal circumstances, I’d agree with you about the cash offers, but that’s not the case in today’s market. There is an abundant supply of cash buyers out there, according to newspaper reports, realtors, and based on our own experience. It’s to the point that cash buyers cannot really get much of a discount.[/quote]
That’s hard to believe since I’m seeing the opposite occurring. But I don’t have data to back up what I’m seeing, other than fixer closing MUCH lower than a comparable turn key home minus the cost of upgrades. I see that A LOT. But it’s anecdotal.[quote=CA renter]In the transactions we were involved with, we didn’t care if it was a cash buyer or not, as long as they had 20% down; the final price was all that mattered…and that includes sales we made when the credit market was absolutely frozen. Now, it’s even easier.[/quote]
Did you turn down a higher offer with less than 20% down? YouAugust 25, 2011 at 1:29 AM #724865Participant[quote=CA renter]Under normal circumstances, I’d agree with you about the cash offers, but that’s not the case in today’s market. There is an abundant supply of cash buyers out there, according to newspaper reports, realtors, and based on our own experience. It’s to the point that cash buyers cannot really get much of a discount.[/quote]
That’s hard to believe since I’m seeing the opposite occurring. But I don’t have data to back up what I’m seeing, other than fixer closing MUCH lower than a comparable turn key home minus the cost of upgrades. I see that A LOT. But it’s anecdotal.[quote=CA renter]In the transactions we were involved with, we didn’t care if it was a cash buyer or not, as long as they had 20% down; the final price was all that mattered…and that includes sales we made when the credit market was absolutely frozen. Now, it’s even easier.[/quote]
Did you turn down a higher offer with less than 20% down? You -
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