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Are you changing your behavior in response to current events? (1 Viewer)

Jason_V

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Kinda sorta tangential to the whole conversation: I'm learning a ton in the last month or so about shopping for a condo/townhouse. Three places I've put offers on-two of the offers were for the asking price-and outbid on all three of them. The best thing I learned so far is how to make decisions quickly and not screw around with hemming or hawing.

Other people's opinions are great, but this is going to ultimately be my place and my decision. I have to be happy with it. (That's a swipe at my parents, to be honest.)

There's also one major lesson I intrinsically know from Dave Ramsey, but is being hammered home right now: cash is king. There are a number of places which won't even look at offers with financing attached (FHA or conventional).

It's turning back into a sellers market, especially up this way, where property values are already higher than many parts of the country.

I won't lie: I am frustrated with the entire process. I half-joke to the realtor I need to win the lottery so we can have a totally different conversation and price range to look at....
 

Adam Gregorich

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Originally Posted by Jason_V /t/276804/are-you-changing-your-behavior-in-response-to-current-events/480#post_3946769
Kinda sorta tangential to the whole conversation: I'm learning a ton in the last month or so about shopping for a condo/townhouse. Three places I've put offers on-two of the offers were for the asking price-and outbid on all three of them. The best thing I learned so far is how to make decisions quickly and not screw around with hemming or hawing.

Other people's opinions are great, but this is going to ultimately be my place and my decision. I have to be happy with it. (That's a swipe at my parents, to be honest.)

There's also one major lesson I intrinsically know from Dave Ramsey, but is being hammered home right now: cash is king. There are a number of places which won't even look at offers with financing attached (FHA or conventional).

It's turning back into a sellers market, especially up this way, where property values are already higher than many parts of the country.

I won't lie: I am frustrated with the entire process. I half-joke to the realtor I need to win the lottery so we can have a totally different conversation and price range to look at....
I was initially shocked with your comment about financing, but with all the new crap with trying to get a mortgage, even with FHA I guess cash removes all the uncertainty with the bank and appraisal. You are right that it is your place and your decision, but don't be caught in the competition of bidding and pay more than you want. I know you don't want to hear this, but I'm glad that the market is starting to get more solid, hopefully the stability will start spreading through the top of the market. I need to get at least close to where my home value was a few years ago. The fact that prices are stabilizing also means that the banks have started to clean out all their foreclosures which is needed for the market to stabilize. Even with prices starting to increase, you are still buying at the bottom and combined with the low rates its a perfect time to buy.
 

Jason_V

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I never thought this was going to be an easy process, mind you. And I know I'm a first time home buyer so I'm being super cautious and conservative with what I'm looking at/trying to afford. However, I have preapproval from the bank for two different types of financing, I can easily make the downpayment and my credit history is clean. So I think I'm doing everything right...but it's not working right now.

Or, as Picard said to Data, "It is possible to commit no mistakes and still lose. That is not a weakness, that is life."

I told my realtor from day one I won't get into a bidding war. If someone wants to pay $10k more than the comps in the area support, let them. (The second place I put an offer on-I offered the list price-was rejected for a higher bid plus waiving both inspection and appraisal. Not gonna happen on my watch.)

My major issue is an income "problem." (I make good money-more than I've ever made in my life-but it's not Microsoft or Amazon or Nordstrom or Boeing money. And yes, I have applied for jobs when they become open at all those places.) What I make doesn't quite get me in this area that it would in Michigan or Texas.

But upwards and onwards. I'm gonna keep going. This just means I wasn't meant to have these three places.
 

Aaron Silverman

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The requirements when applying for a mortgage these days are appalling -- lenders have overcorrected from their days of nonsense "liar loans." As one example (of many) from when I got my mortgage late last year, I spent WEEKS going back and forth with the lender over $5000 that appeared in my bank account -- it was a CD that I'd owned for YEARS and simply cashed out into my checking account (at the same bank) when it matured. Even after I got them a letter from my bank explaining what the deal was, the lender continued pestering my mortgage broker about it. AND I DIDN'T EVEN NEED THE MONEY FOR MY DOWN PAYMENT! We mainly just cashed it out to buy new furniture! Never mind the fact that I'd had two previous mortgages totaling over 12 years and never missed a payment.
I was really lucky to have a great mortgage broker who was really on the ball. (The guy buying my old house had no such luck, which led to all sorts of agita for him and for us.)
As for the market, what I found really interesting was that there were lots of cheap foreclosures and short sales on the market, but most of them were in terrible condition. The places worth getting (assuming one didn't want to do major repairs/ renovations) still commanded decent prices and often attracted multiple bidders.
Hang in there, Jason -- we looked for months, made a few offers, and lost out on several places, and even when we went under contract on our new place it took six months for the short sale to go through (we actually had to crash at a friend's house for over a month after selling our old place). But the place we ended up getting is perfect! Good luck.
 

ManW_TheUncool

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Yeah, the market (or rather the market's practices) definitely seems to have gone a bit nutty even though it seems to be stabilizing on the whole.

We were looking for something for my in-laws in our area 2(!) Thanksgiving weekends ago, and I found a pre-foreclosure townhouse-type building where the owner (of 30-plus years) ended up owing the banks substantially more than the post-crash value of the house in 2nd mortgages and whatever loans -- it was not your usual case of someone buying more home than he could afford, but supposedly, he bought the house real cheap long before the neighborhood skyrocketed in value and basically used it to pay for all his kids' college education, etc. The banks (mainly BoA) got stuck and tried to sell it for a while before we found it. They actually found a buyer probably more than 1/2 year before us, but the buyer decided to back out because he/she was told the banks may need to take 5-6 months to work out the details, etc. to complete the sale. Well, they must've been overly optimistic on the 5-6-month estimate because it ended up taking us just over 1.5(!) years to complete the purchase, and the ridiculous slowness (and whatever shenanigans) was *ALL* on the seller side (ie. the banks although there was also some bit of shenanigans from one of the owner's kids it seems) -- my in-laws were actually well prepared to sign contract and close quickly w/ zero concerns about mortgage and such.

Would've thought the banks should be happy to unload the house asap, especially since they got a fair offer from my in-laws (and have no worries about my in-laws' funding), but instead, they dragged their feet for 1.5 years and lost out on whatever they could've done w/ the $$$ for that period of time. Fortunately, there was no real hurry for my in-laws (or they would've just moved on and looked for something else).

Sure, there could be solid reasons for them to take their time, eg. work out whatever complicated details between the multiple banks involved, wait a bit for a market rebound to reduce their losses, maybe they want to time their writeoffs to suit them best, etc., but if they were honest w/ themselves, they should've known that they were just delaying the inevitable. And if they pissed off my in-laws enough w/ the delays, they would've lost out on a very solid buyer and be back to square one. It's not like the market was likely to rebound *THAT* quickly, *THAT* much for the delays (and potential risks) to be worth it to them near as I can tell -- and banks never like to actually own and sit on houses like that AFAIK. Also, this house needs a lot of work, so it's probably not the easiest house to sell either, if they need/want to attract a solid buyer.

Anyhoo... Yeah, be prepared to work at it. Hopefully, you'll find what you really want and can afford before too long.

Cheers!

_Man_
 

Jason_V

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Here's the other fun part: in trying to cover all my bases, I'm approved for an FHA mortgage and working on a conventional. Not only do they need more information, but the three credit cards I currently don't have "long enough" histories on them. So they also wanted rent, Verizon and Comcast statements for the last year. These items are no problem, obviously, since I am about as anally retentive about money and statements as possible, but come on.

I'm completely keeping the faith right now and trying to not get frustrated. I really appreciate you guys and your thoughts. It makes me think I'm not completely out of my mind.
 

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