Buying a house

In case you are ever going to buy a house…..

It’s now happened to me twice….
Positive for me…. but bad for ‘the world’, especially sellers..

Real Estate brokers get paid on commission, typically has been a 6% total commission. 3% to listing agent, 3% to buyers agent. If there is no buyers agent the seller’s agent gets the whole 6%. (The rules have technically changed, but in reality haven’t changed much. The 6% can be negotiated down a bit in most cases).

Anyway, checked Zillow on my house. Its most recent comp they have is $390k from 6 months ago. Using that comp mine is valued at $472k. Since then two similar houses have sold, first for $550k, next for $652k. And one just came on the market asking $700k!
How did I get mine for $267k 7 years ago? Wife saw it on line and loved it. But when we went to see it, it was ‘pending’ already. The broker let me know it was ‘contingent’ and might fall through. The contract was for $310k. I offered $260k, all cash, and told broker to call if it fell through and they accepted my offer. Did not expect a call back. Got a call back saying they would take $300, I said $260. Not sure exactly how it went but I eventually did go up to $267.
I am SURE the agent pushed it through at that lowball price because he was getting 6% of $267k instead of potential 3% of $300k. Good for agent, bad for seller.
POINT BEING …. Don’t use an agent if you are a buyer!

Next post about new house. Then mortgage misery!

Quote: SOOPOO

In case you are ever going to buy a house…..

It’s now happened to me twice….
Positive for me…. but bad for ‘the world’, especially sellers..

Real Estate brokers get paid on commission, typically has been a 6% total commission. 3% to listing agent, 3% to buyers agent. If there is no buyers agent the seller’s agent gets the whole 6%. (The rules have technically changed, but in reality haven’t changed much. The 6% can be negotiated down a bit in most cases).

Anyway, checked Zillow on my house. Its most recent comp they have is $390k from 6 months ago. Using that comp mine is valued at $472k. Since then two similar houses have sold, first for $550k, next for $652k. And one just came on the market asking $700k!
How did I get mine for $267k 7 years ago? Wife saw it on line and loved it. But when we went to see it, it was ‘pending’ already. The broker let me know it was ‘contingent’ and might fall through. The contract was for $310k. I offered $260k, all cash, and told broker to call if it fell through and they accepted my offer. Did not expect a call back. Got a call back saying they would take $300, I said $260. Not sure exactly how it went but I eventually did go up to $267.
I am SURE the agent pushed it through at that lowball price because he was getting 6% of $ instead of potential 3% of $300k. Good for agent, bad for seller.
POINT BEING …. Don’t use an agent if you are a buyer!

T

Next post about new house. Then mortgage misery!
link to original post

I bought my first house in the 1990's and I was in my mid 20's. I put a bid in on it and was told they already accepted another offer. I kept looking for about three months putting various offers in and getting rejected. Out of the blue I got a call from my agent saying that one of the houses I put an offer on fell through and they would acccept my offer if I was still interested. I told my agent if I put an offer in I must have liked it and let's go ahead with the purchase. After the inspections and paperwork everything was done. One problem, I had no idea which house I bought so I had to have my agent take me to it. It turns out it was the first house I put an offer on about four months ago. Once seeing the house I bought I didn;t even remember seeing this one because I probably looked at close to 50 houses over those four months.

To sum it up, I bought a house and had no idea where it was.

New house. In The Villages. I probably shouldn’t even post this as haven’t closed yet!
Wife has been getting texts/emails/links to houses since we first visited Florida sort of looking to buy 5 or so years ago. She forwards me many listings which have fallen in exactly two categories, with no overlap.
1. I don’t like it
2. More than I want to spend.

A week or two ago she sends me one that 1. I like and 2. Is around what I want to spend! At first I actually think it is an error. It’s priced like smaller houses with no ‘feature’. It has lots of ‘features’. On ‘turtle preserve’. Putting green in back. Built in in ground hot tub. Oversized lanai. Full two car garage with extra 1/2 garage for golf carts. On cul de sac.
Anyway, I decided to pull the trigger. Had a friend whose taste I trust implicitly who lives there go look at it. She calls back and says…. ‘You are lucky. If I didn’t already own a house I’d buy this one before you’d ever see it! I told her I was going to offer the asked price. She said ‘let the bidding war begin’!
Called broker. Made my offer. Asked for details on who he uses for inspection, mortgage, insurance, etc…. That day he got back to me saying offer was accepted, he’d arrange the 3 necessary Florida inspections. He said, maybe strongly implied? (not verbatim) that since he’s getting ‘both sides’ he’ll pay for 1/2 of the main inspection, and all of the other two. I think the ‘bug’ inspection is subsidized in the hope that I contract with that bug company for service?
Anyway, I got a contract the next day, signed it, wired my deposit, and now am in the mortgage process. That’s next post.

Point being…. Don’t get an agent if you are a buyer.

My brother in law is an agent. He says he would never act that way not in the seller’s best interests, but surmises MOST would. It is a major flaw in the system that such an anti seller incentive can even exist.

Sounds fantastic, congratulations.

One thing to check on that hopefully your agent has already discussed or checked is to make sure the house has no pending assessments. I wasn't familiar with this concept until I moved to Florida. Basically, the city or county charges the homeowner for the costs of hooking up to electricity and water systems to recoup their costs. Houses that I looked at still owed up to $35k for those fees. The older the home the more likely it has been paid off but some will surprise you. My house is close to 30 years old and still owed about $2k on those assessments when I bought it.

Quote: DRich

Sounds fantastic, congratulations.

One thing to check on that hopefully your agent has already discussed or checked is to make sure the house has no pending assessments. I wasn't familiar with this concept until I moved to Florida. Basically, the city or county charges the homeowner for the costs of hooking up to electricity and water systems to recoup their costs. Houses that I looked at still owed up to $35k for those fees. The older the home the more likely it has been paid off but some will surprise you. My house is close to 30 years old and still owed about $2k on those assessments when I bought it.
link to original post

There is a ‘bond’ that all Villages new home buyers have to pay to the Villages. Varies but around $25k? Some pay it off immediately, some like a mortgage pay it off over years. The house I’m buying has its bond fully paid off already.
I of course in my mind just added ‘outstanding bond balance’ to purchase price when figuring out the cost of a pre owned house I was looking at.

Quote: SOOPOO

There is a ‘bond’ that all Villages new home buyers have to pay to the Villages. Varies but around $25k? Some pay it off immediately, some like a mortgage pay it off over years. The house I’m buying has its bond fully paid off already.
I of course in my mind just added ‘outstanding bond balance’ to purchase price when figuring out the cost of a pre owned house I was looking at.

That sounds exactly like what I was thinking of. Where i live they have new neighborhoods that are built before the water system is installed. Many people will go years before they have city water and sewer. Once they are told they are getting city water hooked up they are excited until they find out they will be charged $30k for it.

Quote: SOOPOO

II offered $260k, all cash,

Do you know if you saved money? So, if you buy something and have 30 years to pay off, you die early you spend less than all the cash you put up front.

Quote: SOOPOO

New house. In The Villages. I probably shouldn’t even post this as haven’t closed yet!
Wife has been getting texts/emails/links to houses since we first visited Florida sort of looking to buy 5 or so years ago. She forwards me many listings which have fallen in exactly two categories, with no overlap.
1. I don’t like it
2. More than I want to spend.

A week or two ago she sends me one that 1. I like and 2. Is around what I want to spend! At first I actually think it is an error. It’s priced like smaller houses with no ‘feature’. It has lots of ‘features’. On ‘turtle preserve’. Putting green in back. Built in in ground hot tub. Oversized lanai. Full two car garage with extra 1/2 garage for golf carts. On cul de sac.
Anyway, I decided to pull the trigger. Had a friend whose taste I trust implicitly who lives there go look at it. She calls back and says…. ‘You are lucky. If I didn’t already own a house I’d buy this one before you’d ever see it! I told her I was going to offer the asked price. She said ‘let the bidding war begin’!
Called broker. Made my offer. Asked for details on who he uses for inspection, mortgage, insurance, etc…. That day he got back to me saying offer was accepted, he’d arrange the 3 necessary Florida inspections. He said, maybe strongly implied? (not verbatim) that since he’s getting ‘both sides’ he’ll pay for 1/2 of the main inspection, and all of the other two. I think the ‘bug’ inspection is subsidized in the hope that I contract with that bug company for service?
Anyway, I got a contract the next day, signed it, wired my deposit, and now am in the mortgage process. That’s next post.

Point being…. Don’t get an agent if you are a buyer.

My brother in law is an agent. He says he would never act that way not in the seller’s best interests, but surmises MOST would. It is a major flaw in the system that such an anti seller incentive can even exist.
link to original post

I have purchased several homes in my lifetime, and my personal approach to any broker I was using to buy a house was: I will NOT buy any house that you, the broker, have personally listed.

SOOPOO, since you are now under contract, I suggest you read an article I saw in Google News from NBC News about the insurance calamity now unfolding in Florida. I do not know how to link it, but I am sure someone else could find and link it. The article is very disturbing and quite credible.

tuttigym

I thought the anti-trust settlement the fed govt brought onto those greedy 6% real estate Monopoly was supposed to lower fees to 1% each for seller and buyers agent???

Quote: tuttigym

SOOPOO, since you are now under contract, I suggest you read an article I saw in Google News from NBC News about the insurance calamity now unfolding in Florida. I do not know how to link it, but I am sure someone else could find and link it. The article is very disturbing and quite credible.

I would like to read that article. As someone that lives in Florida the only problem I have noticed is that premiums are going up very fast. There will always be insurance available, the question is just the cost.

Quote: DRich

Quote: tuttigym

SOOPOO, since you are now under contract, I suggest you read an article I saw in Google News from NBC News about the insurance calamity now unfolding in Florida. I do not know how to link it, but I am sure someone else could find and link it. The article is very disturbing and quite credible.

I would like to read that article. As someone that lives in Florida the only problem I have noticed is that premiums are going up very fast. There will always be insurance available, the question is just the cost.
link to original post

Insurance companies are leaving the state, and the state-run flooding program will run out of money after two storms in a month.

Quote: billryan

Quote: DRich

Quote: tuttigym

SOOPOO, since you are now under contract, I suggest you read an article I saw in Google News from NBC News about the insurance calamity now unfolding in Florida. I do not know how to link it, but I am sure someone else could find and link it. The article is very disturbing and quite credible.

I would like to read that article. As someone that lives in Florida the only problem I have noticed is that premiums are going up very fast. There will always be insurance available, the question is just the cost.
link to original post

Insurance companies are leaving the state, and the state-run flooding program will run out of money after two storms in a month.
link to original post

Great. So, you buy a house with a mortgage, and the bank requires property insurance which is either not available or doubles your payment with premium costs. What do you do??

tuttigym

Quote: billryan

Quote: DRich

Quote: tuttigym

SOOPOO, since you are now under contract, I suggest you read an article I saw in Google News from NBC News about the insurance calamity now unfolding in Florida. I do not know how to link it, but I am sure someone else could find and link it. The article is very disturbing and quite credible.

I would like to read that article. As someone that lives in Florida the only problem I have noticed is that premiums are going up very fast. There will always be insurance available, the question is just the cost.
link to original post

Insurance companies are leaving the state, and the state-run flooding program will run out of money after two storms in a month.
link to original post

All insurance companies will not leave. Too much money available by raising rates if they have a monopoly.

Quote: tuttigym

Quote: billryan

Quote: DRich

Quote: tuttigym

SOOPOO, since you are now under contract, I suggest you read an article I saw in Google News from NBC News about the insurance calamity now unfolding in Florida. I do not know how to link it, but I am sure someone else could find and link it. The article is very disturbing and quite credible.

I would like to read that article. As someone that lives in Florida the only problem I have noticed is that premiums are going up very fast. There will always be insurance available, the question is just the cost.
link to original post

Insurance companies are leaving the state, and the state-run flooding program will run out of money after two storms in a month.
link to original post

Great. So, you buy a house with a mortgage, and the bank requires property insurance which is either not available or doubles your payment with premium costs. What do you do??

tuttigym
link to original post

I would suggest that if you can't afford the loan and insurance, don't take one. Insurance is not required in most places if you own the home outright.

Quote: SOOPOO

POINT BEING …. Don’t use an agent if you are a buyer!

That is a tricky one. If you know the house you want and what you are doing then you can probably make it work. But 90% of buyers will be better off with an agent.

When I bought my first place having an agent worked. The big thing is most people do not know what they want in a house. I did and didn't. I put an unsuccessful bid in on the second place I looked at. Agent was like, "uh, you've seen two places and the first was in horrible shape?" I said how in my business I saw lots of houses, easily 600 or more over 3 years. I knew what I liked. That is the exception. A good agent will help you find the right place and negotiate for you. This might save weeks of looking.

When I got my current place it was a total wreck. He and I agreed the price was just a little too high, wait and send a counter. That weekend the seller lowered the price. We still countered lower! But what else an agent does is set up all the things you need. WDIR report, dye test, other stuff. They might have a mortgage broker to suggest.

Hopefully I never buy again. But I am stupid and will look for a flipper in a couple years as I cannot help myself. I have owned 4 houses in my life, is that average?

Quote: DRich

Quote: tuttigym

Quote: billryan

Quote: DRich

Quote: tuttigym

SOOPOO, since you are now under contract, I suggest you read an article I saw in Google News from NBC News about the insurance calamity now unfolding in Florida. I do not know how to link it, but I am sure someone else could find and link it. The article is very disturbing and quite credible.

I would like to read that article. As someone that lives in Florida the only problem I have noticed is that premiums are going up very fast. There will always be insurance available, the question is just the cost.
link to original post

Insurance companies are leaving the state, and the state-run flooding program will run out of money after two storms in a month.
link to original post

Great. So, you buy a house with a mortgage, and the bank requires property insurance which is either not available or doubles your payment with premium costs. What do you do??

tuttigym
link to original post

I would suggest that if you can't afford the loan and insurance, don't take one. Insurance is not required in most places if you own the home outright.
link to original post

Great advice,so, what percentage of the buying public can pay cash for the house they want? I would say that is just a bit unrealistic.

tuttigym

Quote: AZDuffman

Quote: SOOPOO

POINT BEING …. Don’t use an agent if you are a buyer!

That is a tricky one. If you know the house you want and what you are doing then you can probably make it work. But 90% of buyers will be better off with an agent.

I agree 100% with that. Most buyers will be better with a buyers agent.

Quote: tuttigym

Great advice,so, what percentage of the buying public can pay cash for the house they want? I would say that is just a bit unrealistic.

tuttigym

Most can not. I think today many people would be better off waiting to buy a house.

As far as insurance, I am not worried about getting insurance. I am ‘worried’ about the cost. But will have to pay the going rate.

As far as a buyer using an agent…. These last two houses I will own I am 99+% convinced I would not have gotten if I used an agent. And I got a better price on both than would have been available had I used an agent.

As far as the decision to use a mortgage or not, it was easy for the first house. It was much cheaper than the second one, and I had enough cash on hand. This one I’d have to liquidate a lot of stock/bonds all at once and pay a lot of capital gains taxes. But a 5% mortgage on $500k means $25k (first year at least) in just interest.

As a general concept I hate owing anyone anything. If history repeats I’ll be paying this mortgage off early. Even if it technically doesn’t make financial sense.

Good experience. Anyone can be a liar these days.

Quote: SOOPOO

As far as insurance, I am not worried about getting insurance. I am ‘worried’ about the cost. But will have to pay the going rate.

As far as a buyer using an agent…. These last two houses I will own I am 99+% convinced I would not have gotten if I used an agent. And I got a better price on both than would have been available had I used an agent.

As far as the decision to use a mortgage or not, it was easy for the first house. It was much cheaper than the second one, and I had enough cash on hand. This one I’d have to liquidate a lot of stock/bonds all at once and pay a lot of capital gains taxes. But a 5% mortgage on $500k means $25k (first year at least) in just interest.

As a general concept I hate owing anyone anything. If history repeats I’ll be paying this mortgage off early. Even if it technically doesn’t make financial sense.
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Food for thought on a mortgage. You are better at least having an unused HELOC. And few know this!

Having a mortgage makes you less likely to be a target of fraud of all types. Scammers will look for lien-free properties to work their schemes. Deed fraud seems to be on the rise. Having a lien already makes them more likely to move on.

Quote: AZDuffman

Quote: SOOPOO

As far as insurance, I am not worried about getting insurance. I am ‘worried’ about the cost. But will have to pay the going rate.

As far as a buyer using an agent…. These last two houses I will own I am 99+% convinced I would not have gotten if I used an agent. And I got a better price on both than would have been available had I used an agent.

As far as the decision to use a mortgage or not, it was easy for the first house. It was much cheaper than the second one, and I had enough cash on hand. This one I’d have to liquidate a lot of stock/bonds all at once and pay a lot of capital gains taxes. But a 5% mortgage on $500k means $25k (first year at least) in just interest.

As a general concept I hate owing anyone anything. If history repeats I’ll be paying this mortgage off early. Even if it technically doesn’t make financial sense.
link to original post

Food for thought on a mortgage. You are better at least having an unused HELOC. And few know this!

Having a mortgage makes you less likely to be a target of fraud of all types. Scammers will look for lien-free properties to work their schemes. Deed fraud seems to be on the rise. Having a lien already makes them more likely to move on.
link to original post

Not saying 0% chance. But there are few things I’m worrying less about than someone stealing either of my houses. If I’m making a list deed fraud comes in at #286.

Quote: SOOPOO

Quote: AZDuffman

Quote: SOOPOO

As far as insurance, I am not worried about getting insurance. I am ‘worried’ about the cost. But will have to pay the going rate.

As far as a buyer using an agent…. These last two houses I will own I am 99+% convinced I would not have gotten if I used an agent. And I got a better price on both than would have been available had I used an agent.

As far as the decision to use a mortgage or not, it was easy for the first house. It was much cheaper than the second one, and I had enough cash on hand. This one I’d have to liquidate a lot of stock/bonds all at once and pay a lot of capital gains taxes. But a 5% mortgage on $500k means $25k (first year at least) in just interest.

As a general concept I hate owing anyone anything. If history repeats I’ll be paying this mortgage off early. Even if it technically doesn’t make financial sense.
link to original post

Food for thought on a mortgage. You are better at least having an unused HELOC. And few know this!

Having a mortgage makes you less likely to be a target of fraud of all types. Scammers will look for lien-free properties to work their schemes. Deed fraud seems to be on the rise. Having a lien already makes them more likely to move on.
link to original post

Not saying 0% chance. But there are few things I’m worrying less about than someone stealing either of my houses. If I’m making a list deed fraud comes in at #286.
link to original post

Just putting it out there. I’ve seen all kinds of lien issues. People don’t realize how easy it can happen.

When I see this thread I think of, "Buying a Horse."

You can't say that you've arrived until you've blown money on a race horse that 99/100 times you will never get back.

Quote: MDawg

When I see this thread I think of, "Buying a Horse."

You can't say that you've arrived until you've blown money on a race horse that 99/100 times you will never get back.
link to original post

My wife's family used to have and race Quarter horses. A very expensive hobby.

Quote: MDawg

When I see this thread I think of, "Buying a Horse."

You can't say that you've arrived until you've blown money on a race horse that 99/100 times you will never get back.
link to original post

Stay away from any investment you have to feed.

Called for quotes from two Florida insurance companies today. I forgot today is sort of a holiday.

Quote: SOOPOO

Quote: MDawg

When I see this thread I think of, "Buying a Horse."

You can't say that you've arrived until you've blown money on a race horse that 99/100 times you will never get back.
link to original post

Stay away from any investment you have to feed.

Called for quotes from two Florida insurance companies today. I forgot today is sort of a holiday.
link to original post

Last year mine went from $3800 to $7000 with Progressive (I think). I was able to shop around and get $4400 from USAA. Your numbers may be significantly different since you are more inland.

When I was younger and dumber, I invested $2500 for a sliver of ownership of a horse with Derby potential. Blind Justice or Knoights Justice, or something similar. It finished second and third in two races, and then was in a big race with 12 entrees. The trainer said this was his race and he'd finish in the top three. He didn't, and the trainer got fired. About a year later, I got a check for $800 with no explanation and no number to call, and a few weeks later, I got a second for $500. The rest was for bragging rights.