OT - Anyone realtors or mortgage lenders on the board?

[itseasyas1-2-3]

What I did to come up with that figure was to take a $400k loan 20% down, at 4% was roughly a $1500 payment, and then worked backwards, reducing the value of the home until arriving at a similar payment, but at a 12% interest rate. That resulted in a home loan starting figure of 180k, and the difference between the two was how I got 55%

I didn't use any formula, just logic. My home has been dropping in "value" about 1.8% a month for 3 months now, and we haven't even started a housing crisis. I figure that to be about 10X's what its been.

Again, my adult kids, my wife and I all own our homes outright, so it's not something I fret about. I just feel so bad that so many people are going to get blindsided when the shtf.

Bottom line, I'm a frugal dude. My motto has always been, "people buy when things are good and many times have to pay back when times are bad." I avoid that like the plague.

Off topic. Now we have millions of citizens doing the BNPL (buy now, pay later) short-term credit in the purchase of food. They can buy now, pay 25% of the total cost and put the other 75% off for 3 months. It's kind of a payday loan scenario for those who are financing the food they eat. Bad deal.

 

[itseasyas1-2-3]

If home values drop by that much, appraised value should also lower correct?

Oddly, from 2018 my home was appraised at + 4.38% higher. Then from 2020 it was appraised at + 8.76% higher.

Very convenient it was exactly double. So in 2022 will it be + 17.52%?

It's hard to justify an exact doubling every 2 years in the appraised rate, when for 3 straight months my home value has decreased - 1.8%.

They just guess.

 

[stellawinxie]

It's your fault that you fell for the tricks of a realtor. Their main task was to sell this house because they knew the neighbors there were not very.

 

[Trumplestiltskin]

This is funny. People whining about rates today weee willing to pay 50/100k over list 6 months ago. Quite humorous reading these responses.

 

[litespeedhuskerfan]

This is funny. People whining about rates today weee willing to pay 50/100k over list 6 months ago. Quite humorous reading these responses.

Not true....very few houses sold for that much over, and rates were low enough it helped offset the cost.

People who did not need to buy a home then, or even now, all act so smug and wise but the reality is, you are very lucky if you are set for life in your current home and don't need to move. I was not so lucky and paid 15K over list back in January and thank God every day I did and am now set...but if you are a prisoner of the times, it is what it is. If you need a home now, you're going to get killed with today's interest rate, but you have to live somewhere, doesn't make anyone dumb then or now....just bad timing.

 

[Tahoe78]

So I have been transferred to a different state. Housing market is nuts in this state. We saw a home online and liked it; Realtor did a video chat with us as he went through the home. Its a nice home, nothing wrong with it. I asked him about the neighboorhood and he said its a good neigborhood , the crime rate is middle ground. We put a bid on it and won the house and then put $2K down as earnest money. I flew to the state to start work tomorrow and decided to drive by our new home. House looks like advertised but the neighboorhood is awful. Not anywhere close to what I would call acceptable. So here is my question. Am I screwed and have to purchase this home in a bad neighborhood or can I back out and let them keep the 2K? The realtor had 5 star reviews but I feel lied too. Whats my options?

Very easy to get out of a contract... An example: You do the inspection, then you say I am backing out because of something in the inspection. If asked why you are objecting and backing out just say "Because I can." There are so many reasons you can get out such as inspection, terms of the loan... but remember this always just say "Because I can." You will get your earnest money back.

 

[drubendall]

Not true....very few houses sold for that much over, and rates were low enough it helped offset the cost.

People who did not need to buy a home then, or even now, all act so smug and wise but the reality is, you are very lucky if you are set for life in your current home and don't need to move. I was not so lucky and paid 15K over list back in January and thank God every day I did and am now set...but if you are a prisoner of the times, it is what it is. If you need a home now, you're going to get killed with today's interest rate, but you have to live somewhere, doesn't make anyone dumb then or now....just bad timing.

Yeah, it stinks. Rates around 3% were fantastic, but they weren't going to last and accelerated the appreciation. If I had to guess, I think we'll settle into a period of between 4 and 5% for a few years. It's too big of a segment of the economy to be down for any significant amount of time.

 

[drubendall]

Very easy to get out of a contract... An example: You do the inspection, then you say I am backing out because of something in the inspection. If asked why you are objecting and backing out just say "Because I can." There are so many reasons you can get out such as inspection, terms of the loan... but remember this always just say "Because I can." You will get your earnest money back.

This is true. That's why the inspection needs to get done soon after an accepted contract so the viability of a deal is determined early on. Most folks that enter into a contract are serious and want to buy the house. But if anything changes, they can exit and only have to eat the cost of the inspection which is going to be under 500 bucks.

 

[NikkiSixx]

Not true....very few houses sold for that much over, and rates were low enough it helped offset the cost.

People who did not need to buy a home then, or even now, all act so smug and wise but the reality is, you are very lucky if you are set for life in your current home and don't need to move. I was not so lucky and paid 15K over list back in January and thank God every day I did and am now set...but if you are a prisoner of the times, it is what it is. If you need a home now, you're going to get killed with today's interest rate, but you have to live somewhere, doesn't make anyone dumb then or now....just bad timing.

you could have waited.. even a year to make that kind of financial move and others warned you, so you did it by your own choice.. that said, i hope you don't lose any money.

 

[litespeedhuskerfan]

you could have waited.. even a year to make that kind of financial move and others warned you, so you did it by your own choice.. that said, i hope you don't lose any money.

Dude we killed it. Hahaha if that came out any other way....and no we could not have waited.

Spoken like somebody who wasn't getting married to somebody who's lease was ending and blending fams and bringing a pooch into the mix. But we made out great and feel like we won the lottery with our situation. I just dislike it when people say you shouldn't buy or were dumb for buying now or whatevs....when ya need a home ya need a home.

Want buyers are a different animal.

 

[Trumplestiltskin]

Not true....very few houses sold for that much over, and rates were low enough it helped offset the cost.

People who did not need to buy a home then, or even now, all act so smug and wise but the reality is, you are very lucky if you are set for life in your current home and don't need to move. I was not so lucky and paid 15K over list back in January and thank God every day I did and am now set...but if you are a prisoner of the times, it is what it is. If you need a home now, you're going to get killed with today's interest rate, but you have to live somewhere, doesn't make anyone dumb then or now....just bad timing.

Well, considering I run one of the largest Branches in an 18 State region, I can tell you you’re wrong in both counts. Denver and surrounding counties alone were minimum 20/30k over already inflated List. A little in rate won’t make up for that under any circumstance considering the Fed is on record saying they are targeting a 10, or closer to 20%, price adjustment before they stop the rate hikes.

 

[drubendall]

you could have waited.. even a year to make that kind of financial move and others warned you, so you did it by your own choice.. that said, i hope you don't lose any money.

Prices aren't going down in Omaha. He got a better interest rate than he would have today.

 

[drubendall]

Well, considering I run one of the largest Branches in an 18 State region, I can tell you you’re wrong in both counts. Denver and surrounding counties alone were minimum 20/30k over already inflated List. A little in rate won’t make up for that under any circumstance considering the Fed is on record saying they are targeting a 10, or closer to 20%, price adjustment before they stop the rate hikes.

It's regional. Houses are still selling at 98% of ask here. Denver market has nothing to do with our market.

 

[NikkiSixx]

Prices aren't going down in Omaha. He got a better interest rate than he would have today.

I'll be curious to see what it's like next spring in Omaha.

 

[drubendall]

I'll be curious to see what it's like next spring in Omaha.

Here's the deal. The United States is about 2.5 million homes short of where it should be going back to the crash in 2008 when tons of builders went out of business. There is so much pent-up demand for homes. Poor folks are still out of luck. Everyone else is okay. People have built-in equity and are moving up or moving down depending on their stage in life.

 

[NikkiSixx]

Here's the deal. The United States is about 2.5 million homes short of where it should be going back to the crash in 2008 when tons of builders went out of business. There is so much pent-up demand for homes. Poor folks are still out of luck. Everyone else is okay. People have built-in equity and are moving up or moving down depending on their stage in life.

I hope you didn't buy at the top too.

The stock markets have topped out, probably won't reach their Jan 2021 highs again for the next 10-15 years.

Will the real estate market, which had a crazy run up (in some markets) be able to hold those gains or even appreciate over the next 10-15? hard to say.

They are letting enough people in through the border that it's keeping the human demographic demand going.. so maybe there is a chance of that.

 

[drubendall]

I hope you didn't buy at the top too.

The stock markets have topped out, probably won't reach their Jan 2021 highs again for the next 10-15 years.

Will the real estate market, which had a crazy run up (in some markets) be able to hold those gains or even appreciate over the next 10-15? hard to say.

They are letting enough people in through the border that it's keeping the human demographic demand going.. so maybe there is a chance of that.

I built 4 years ago. My interest rate is 3%.

The only thing pissing me off is the local tax assessor.

 

[NikkiSixx]

I built 4 years ago. My interest rate is 3%.

The only thing pissing me off is the local tax assessor.

agree, taxes suck

 

[RedBaloneyPony]

I’m a builder in my early 30s, I’m actually kind of worried about what happens when all the baby boomers die and there is a housing surplus. Kind of pondering what economic spin will result from that. Immigration may mitigate it though.

 

[drubendall]

I’m a builder in my early 30s, I’m actually kind of worried about what happens when all the baby boomers die and there is a housing surplus. Kind of pondering what economic spin will result from that. Immigration may mitigate it though.

Die and/or move into assisted living facilities. So many mini mansions everywhere...

 

[T...Chafes]

Well, considering I run one of the largest Branches in an 18 State region, I can tell you you’re wrong in both counts.

LOL

 

[Pete in LA]

Old thread I know but wanted to address the issue of earnest money. I was a commercial broker in Los Angeles for 5 years in a past life. In California it all depends on the language in the contract. Brokers/Developers/Investors often use earnest money to tie up a prospective property to explore acquisition/financing options. In a large market stalling for time is understood and almost expected. When the market is soft you can write in any conditions you want into the Purchase Agreement and get your earnest money back. When the markets tight the seller holds all the cards and will most likely take all or a percentage of your earnest money. Recently I was back in Eastern Iowa and tried to tie up some commercial real estate with some earnest money contingent on a Phase I environmental passage and a percentage of debt financing and they looked at me like we had three heads. Guys were like, Nah, we'll take cash as is. Long way to say that language matters and it depends what it says in your agreement with the seller. I would also like to tell potential buyers/sellers that you can write and inject any language you want into a contract. Don't ever feel shy or that you have to accept the first draft of a contract.

 

[Blindcheck]

Locking in an interest rate is interesting in Today's market. if you lock in at 6.5% and rates go down, you can always just re-finance...if rates got to 10% , you will feel like a genius at 6.5%...Rates are relative.

 

[litespeedhuskerfan]

Well, considering I run one of the largest Branches in an 18 State region, I can tell you you’re wrong in both counts. Denver and surrounding counties alone were minimum 20/30k over already inflated List. A little in rate won’t make up for that under any circumstance considering the Fed is on record saying they are targeting a 10, or closer to 20%, price adjustment before they stop the rate hikes.

20 to 30 is a far cry from 50 to a 100......most homes did not sell for over what was claimed and a 3.3 rate offsets a lot of cost compared to todays rate, there is nothing debatable about that and I was not wrong on both counts. Denver has a pretty wild market and I know a fire there recently that took out a lot of homes didn't help....but that market doesn't speak for most markets.

 

[DaudaLazarus]

Hey, that's a tough situation to be in. I'm not a realtor or mortgage lender, but I can sympathize with feeling misled about the neighborhood. Usually, backing out of a house deal isn't that simple, and you might lose the earnest money. However, it ultimately depends on the terms in your contract and whether there are any contingencies that would allow you to back out. I'd recommend consulting a lawyer and going through the contract to figure out your options. It might not be exactly what you're looking for, but I heard about a Mortgage Broker in Barnsley that could possibly help with advice on lender specifications or steps to take in a case like this. Good luck, and I hope it works out for ya!

 

[bigboxes]

Hey, that's a tough situation to be in.

Another bot

 

[litespeedhuskerfan]

Another bot

Fun to read back thru here though...hahaha. Houses in my hood still selling for more than we paid 1.5yrs ago and interest rates are double. So basically.....that's about $600 a month more if we had waited.

 

[RedBaloneyPony]

I added onto my house in 2020, just by luck I was able to stay out in front of the extreme material prices and closed on a refinance in 2021 at 3 %. Did almost all the work myself, feels good to have 50 % equity of appraised value. My fear is il never be able to move because il always put that 3% rate on a pedestal.

 

[Huskers123456]

I added onto my house in 2020, just by luck I was able to stay out in front of the extreme material prices and closed on a refinance in 2021 at 3 %. Did almost all the work myself, feels good to have 50 % equity of appraised value. My fear is il never be able to move because il always put that 3% rate on a pedestal.

A bunch of guys at work refinanced but I was already locked in at 3% from 2012 so it didn't make sense for me. A good problem to have.

 

[RedBaloneyPony]

A bunch of guys at work refinanced but I was already locked in at 3% from 2012 so it didn't make sense for me. A good problem to have.

In a way I wish home inflation never happened so quickly. Im at the stage where I’d like to buy some smaller homes in my town to fix up and keep as nice rentals but 4 years ago they would sell for 40-60k. Now they sell for 150k. Just insane to me.

 

[TampaBaySkers]

Fun to read back thru here though...hahaha. Houses in my hood still selling for more than we paid 1.5yrs ago and interest rates are double. So basically.....that's about $600 a month more if we had waited.

As long as you love your house and can afford the payment you’ll be fine when it crashes

 

[dsmalls3]

So I have been transferred to a different state. Housing market is nuts in this state. We saw a home online and liked it; Realtor did a video chat with us as he went through the home. Its a nice home, nothing wrong with it. I asked him about the neighboorhood and he said its a good neigborhood , the crime rate is middle ground. We put a bid on it and won the house and then put $2K down as earnest money. I flew to the state to start work tomorrow and decided to drive by our new home. House looks like advertised but the neighboorhood is awful. Not anywhere close to what I would call acceptable. So here is my question. Am I screwed and have to purchase this home in a bad neighborhood or can I back out and let them keep the 2K? The realtor had 5 star reviews but I feel lied too. Whats my options?

Number 1 rule when you move to a new place: rent for a year, experience the neighborhood, and determine where you would want to live.

You signed a contract for your home, and you will not be able to get out of it. Live and learn

 

[dsmalls3]

In a way I wish home inflation never happened so quickly. Im at the stage where I’d like to buy some smaller homes in my town to fix up and keep as nice rentals but 4 years ago they would sell for 40-60k. Now they sell for 150k. Just insane to me.

We are nearing the end of the 18 year cycle for RE. Hang tight until the next bust. Might be as late as 2028, but don’t buy anything right now unless you are getting it off your hands quick.

Now is not the time to buy your family’s “forever” home. Rent for a few years until something breaks and then buy for a 20-30% coupon. We don’t know what it is yet, but something always breaks to create the down cycle. Wait for something to break, and then you will have about 2-4 years to buy the bottom

 

[jteten]

Yeah don’t buy right now unless you must. Even renting on a month to month lease is worth the extra spend to wait this out.

 

[IM4NUalways]

Neither of the above, but you can back out any time and lose the earnest money.

Might be able to get the earnest money back if you explain your difference of opinion on the neighborhood - but that's likely gone.

Depends on the state.

 

[litespeedhuskerfan]

Does the "Don't buy anything right now" crowd realize people have been saying that for about....ever? What is a person to do if they need to buy now? ...and how many people are going to move to another city and waste a year renting while they scope the place out? Sounds like a terrible idea to me.

Honestly...most of the advice being tossed about come from people who aren't moving because they don't have to, so it's easy to play arm chair QB with somebody else's family.

 

[jteten]

Does the "Don't buy anything right now" crowd realize people have been saying that for about....ever? What is a person to do if they need to buy now? ...and how many people are going to move to another city and waste a year renting while they scope the place out? Sounds like a terrible idea to me.

Honestly...most of the advice being tossed about come from people who aren't moving because they don't have to, so it's easy to play arm chair QB with somebody else's family.

Sounds like the kobayashi Maru of relocations. At least mentally. Good luck if you are currently in this scenario.

 

[litespeedhuskerfan]

Sounds like the kobayashi Maru of relocations. At least mentally. Good luck if you are currently in this scenario.

I'm not.

 

[TampaBaySkers]

Does the "Don't buy anything right now" crowd realize people have been saying that for about....ever? What is a person to do if they need to buy now? ...and how many people are going to move to another city and waste a year renting while they scope the place out? Sounds like a terrible idea to me.

Honestly...most of the advice being tossed about come from people who aren't moving because they don't have to, so it's easy to play arm chair QB with somebody else's family.

As long as you can afford it you’re fine. I guarantee my market and yours are vastly different. People buying now in Tampa have to spend well over 50% of their take-home pay on mortgage payment. That’s really stretching yourself tight, when you can rent a similar house for for 35-40% less.

Then take all the money you had saved for down payment and all the money you’re saving on renting vs buying and stick it in a high yielding savings account or t bills paying over 5.15%.

Buying is usually better 99% of the time, but this is the 1% where renting makes sense.

 

[Muskyhunter16]

Watching mortgage rates over the last couple years has been crazy. I’m at Merrill on the wealth management side but also do a lot of residential and commercial mortgages. The 30 year is still in the 6.5 to 6.75% range after doing a ton of refi’s a couple years ago below 3%, just crazy to me. I think we topping out here however on lending rates and toward Q3 and into Q4, I bet they’re a point lower a across the board