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SD Realtor
ParticipantBSR I understand your concern about the new house. As tg says older ones have plenty of problems and can be WAY more costly to repair then anything that crops up with new ones… It is a tough call. I do think newer construction is of higher quality then older stuff but that is a speculative statement made without much analysis.
“SD, isn’t it true that if a buyer places a deposit based on the builder pre-qualing them and the loan program or the lender vanishes during construction that the buyer is usually refunded their deposit. ”
TG the case above absolutely is true and people will get the money back.
The case I was referring to is as follows. Mr and Mrs qualcomm engineers have 125k to put down on the 775k home in 4S. Now they end up going with the preferred lender because they HAVE TO HAVE those incentives. Thus they work with the lender and go with the lenders program… They choose the jumbo loan and float it because the rates are high right now and escrow cannot close until December because the homes will not be complete until then. They are prequalified, they sign the purchase contract. Now the loan package doesn’t disappear at all… It stays in place but Mr qualcomm starts stressing out in November because he looks at his spreadsheet in earnest and thinks man I am gonna be paying almost 5-6k a month for my mtg, prop taxes, HOA, gardner, homeowners insurance, hoa… wowsers!
Maybe I shouldn’t have signed that purchase agreement.
SD Realtor
ParticipantJosh every 6 weeks or so I shoot him email. I send him very non-confrontational stuff where I politely try to invite him to engage in a debate on or off of his show. I keep the email professional and above board but he has never replied back.
SD Realtor
ParticipantJosh every 6 weeks or so I shoot him email. I send him very non-confrontational stuff where I politely try to invite him to engage in a debate on or off of his show. I keep the email professional and above board but he has never replied back.
SD Realtor
ParticipantJosh every 6 weeks or so I shoot him email. I send him very non-confrontational stuff where I politely try to invite him to engage in a debate on or off of his show. I keep the email professional and above board but he has never replied back.
SD Realtor
ParticipantYep… ALOT of them had MLS history. Most of them did not sell.
SD Realtor
ParticipantYep… ALOT of them had MLS history. Most of them did not sell.
SD Realtor
ParticipantYep… ALOT of them had MLS history. Most of them did not sell.
SD Realtor
ParticipantI think the prudent move would be as follows:
– Run your numbers through a rent vs buy calculator. Factor in EVERYTHING, your tax benefits by staying, other benefits like not having to pay HOA and additional homeowners insurance if you rent… etc…
– If you do plan to sell, be very REALISTIC about your sale. Your net will be sales price – commissions (listing side and buyers agent side) – sellers side closing costs (typically 1% of the sales price – additional credits or concessions the buyer may ask for (these are negotiable but as the market continues to tilt, buyers are asking for more) – prorated mortgage and property tax. Also the 1% estimate I gave on the sellers side are “typical” sellers side expenses such as splitting escrow 50/50, purchasing title insurance for the buyer, paying for the home warranty, paying for county transfer tax $1.10 for every $1000 of the sales price, paying for HOA doc prep, paying for natural hazard and zone disclosure… etc. You may incur more if you have major repair work or major termite damage or any sort of prepayment penalty on your loan.
The commissions you pay are all negotiable and up to you. You can go full service or you can do a for sale by owner or you can use a discount or selected service broker. I would suggest that the commission you offer to the buyers side be competitive with all of your competition in the area.
– If you do sell then take the proceeds and put them in a safe haven or at least a good portion of them. If you are POSITIVE you can make a better return then so bit it. I have a relatively large (by my standards but not by others here) sum of cash I have busted my butt for and 90% of it is in money market and cds… the other 10% is in the market. I don’t get a sparkling return but I sleep at night regardless of the tilt of the market.
– I would encourage homeowners, especially young homeowners to do what Rustico said which is try to hold as many properties as you can as you move through life. Think about it. If you can do it 3 times then by the time you are 50 or 60 you have 3 rentals and they are paid off or close to it… Talk about an instant pension. Just make sure that although you will stay in the home, get to work and start saving money in as prudent as a manner as you can.
– The converse of that is that these are going to be different times. We could indeed have a dip the likes that we or I have never seen. Additionally we may be in a credit crunch situation such that leveraging your home you have lots of equity in (that is presently that you have equity in) may be difficult in the future. We don’t know the lending climate and we don’t know how much equity you will have in a few years.
– On a personal note I did indeed sell one of my rentals (condo in mission vallyey) a few months ago and put the cash away. In that short time the prices have moved down a few percentage points while the proceeds of the sale went into a cd.
Sorry if this post doesn’t help you to decide. Just trying to throw in my two cents.
SD Realtor
ParticipantI think the prudent move would be as follows:
– Run your numbers through a rent vs buy calculator. Factor in EVERYTHING, your tax benefits by staying, other benefits like not having to pay HOA and additional homeowners insurance if you rent… etc…
– If you do plan to sell, be very REALISTIC about your sale. Your net will be sales price – commissions (listing side and buyers agent side) – sellers side closing costs (typically 1% of the sales price – additional credits or concessions the buyer may ask for (these are negotiable but as the market continues to tilt, buyers are asking for more) – prorated mortgage and property tax. Also the 1% estimate I gave on the sellers side are “typical” sellers side expenses such as splitting escrow 50/50, purchasing title insurance for the buyer, paying for the home warranty, paying for county transfer tax $1.10 for every $1000 of the sales price, paying for HOA doc prep, paying for natural hazard and zone disclosure… etc. You may incur more if you have major repair work or major termite damage or any sort of prepayment penalty on your loan.
The commissions you pay are all negotiable and up to you. You can go full service or you can do a for sale by owner or you can use a discount or selected service broker. I would suggest that the commission you offer to the buyers side be competitive with all of your competition in the area.
– If you do sell then take the proceeds and put them in a safe haven or at least a good portion of them. If you are POSITIVE you can make a better return then so bit it. I have a relatively large (by my standards but not by others here) sum of cash I have busted my butt for and 90% of it is in money market and cds… the other 10% is in the market. I don’t get a sparkling return but I sleep at night regardless of the tilt of the market.
– I would encourage homeowners, especially young homeowners to do what Rustico said which is try to hold as many properties as you can as you move through life. Think about it. If you can do it 3 times then by the time you are 50 or 60 you have 3 rentals and they are paid off or close to it… Talk about an instant pension. Just make sure that although you will stay in the home, get to work and start saving money in as prudent as a manner as you can.
– The converse of that is that these are going to be different times. We could indeed have a dip the likes that we or I have never seen. Additionally we may be in a credit crunch situation such that leveraging your home you have lots of equity in (that is presently that you have equity in) may be difficult in the future. We don’t know the lending climate and we don’t know how much equity you will have in a few years.
– On a personal note I did indeed sell one of my rentals (condo in mission vallyey) a few months ago and put the cash away. In that short time the prices have moved down a few percentage points while the proceeds of the sale went into a cd.
Sorry if this post doesn’t help you to decide. Just trying to throw in my two cents.
SD Realtor
ParticipantI think the prudent move would be as follows:
– Run your numbers through a rent vs buy calculator. Factor in EVERYTHING, your tax benefits by staying, other benefits like not having to pay HOA and additional homeowners insurance if you rent… etc…
– If you do plan to sell, be very REALISTIC about your sale. Your net will be sales price – commissions (listing side and buyers agent side) – sellers side closing costs (typically 1% of the sales price – additional credits or concessions the buyer may ask for (these are negotiable but as the market continues to tilt, buyers are asking for more) – prorated mortgage and property tax. Also the 1% estimate I gave on the sellers side are “typical” sellers side expenses such as splitting escrow 50/50, purchasing title insurance for the buyer, paying for the home warranty, paying for county transfer tax $1.10 for every $1000 of the sales price, paying for HOA doc prep, paying for natural hazard and zone disclosure… etc. You may incur more if you have major repair work or major termite damage or any sort of prepayment penalty on your loan.
The commissions you pay are all negotiable and up to you. You can go full service or you can do a for sale by owner or you can use a discount or selected service broker. I would suggest that the commission you offer to the buyers side be competitive with all of your competition in the area.
– If you do sell then take the proceeds and put them in a safe haven or at least a good portion of them. If you are POSITIVE you can make a better return then so bit it. I have a relatively large (by my standards but not by others here) sum of cash I have busted my butt for and 90% of it is in money market and cds… the other 10% is in the market. I don’t get a sparkling return but I sleep at night regardless of the tilt of the market.
– I would encourage homeowners, especially young homeowners to do what Rustico said which is try to hold as many properties as you can as you move through life. Think about it. If you can do it 3 times then by the time you are 50 or 60 you have 3 rentals and they are paid off or close to it… Talk about an instant pension. Just make sure that although you will stay in the home, get to work and start saving money in as prudent as a manner as you can.
– The converse of that is that these are going to be different times. We could indeed have a dip the likes that we or I have never seen. Additionally we may be in a credit crunch situation such that leveraging your home you have lots of equity in (that is presently that you have equity in) may be difficult in the future. We don’t know the lending climate and we don’t know how much equity you will have in a few years.
– On a personal note I did indeed sell one of my rentals (condo in mission vallyey) a few months ago and put the cash away. In that short time the prices have moved down a few percentage points while the proceeds of the sale went into a cd.
Sorry if this post doesn’t help you to decide. Just trying to throw in my two cents.
SD Realtor
ParticipantI give it a 6… okay but not on par with any of the scooby do or hitler references.
I agree with you TG but didn’t post as I am not positive nor am I an accountant. It would seem to me that IRS treatment of a short sale will differ from a true foreclosure or deed in lieu of foreclosure depending on the short sale situation (original purchase money verses a refi or HELOC)
BK could be a good idea. There is a question about a deficiency judgement as well.
ParticipantI give it a 6… okay but not on par with any of the scooby do or hitler references.
I agree with you TG but didn’t post as I am not positive nor am I an accountant. It would seem to me that IRS treatment of a short sale will differ from a true foreclosure or deed in lieu of foreclosure depending on the short sale situation (original purchase money verses a refi or HELOC)
BK could be a good idea. There is a question about a deficiency judgement as well.
ParticipantI give it a 6… okay but not on par with any of the scooby do or hitler references.
I agree with you TG but didn’t post as I am not positive nor am I an accountant. It would seem to me that IRS treatment of a short sale will differ from a true foreclosure or deed in lieu of foreclosure depending on the short sale situation (original purchase money verses a refi or HELOC)
BK could be a good idea. There is a question about a deficiency judgement as well.
ParticipantBSR and JL –
The purchase agreements that the builders have you sign are MUCH more restrictive (is there such a word?) then the standard residential purchase agreement used in a standard resale home.
Indeed the contingency period is VERY short and varies from builder to builder. Also as purchases are filled with emotion many people do not think out numbers very well when they sign the docs. Furthermore they seem to listen but not fully comprehend the loan programs explained to them by the loan officer while the sales lady bobs her head in a hypnotic like fashion telling them that prices will only go up.
BSR floating the rate means the buyers sign the purchase agreement and they have not locked a loan rate for the loan yet. Thus they “float” the rate in escrow until they get within 30 days of closing and then they lock it. Again the overwhelming percentage of buyers of new homes float the rate.
Also when they sign they may indeed have the reserves… everything is fine when you are looking at the models and eating cookies in the sales office. Then as escrow close comes near and people really sit down and look at the budget with the monthly payment, the mello roos, the property taxes… reality hits….thus cancellation…
Remember, these people lining up are not dumb people…They are degreed, they have high paying jobs, they just… well they all have their own reasons for buying. That is okay…If they just all would run the numbers out from the beginning, and then lock a loan, and realize, fully realize what they are getting into, I think most of them would hold off… and those that did will at least buy knowing the real situation. Thus they would have a lower probability of losing the home or deposit down the road.
but many of them dont.
ps – many float the loans also because the lender will charge a little bit more to lock a loan for a long period of time.
SD Realtor -
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