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    Tuesday, October 22, 2019

    Home Unlabelled Highest isn't always Best, Cash is King, and Other Lessons from The Last Listing Real Estate

    Highest isn't always Best, Cash is King, and Other Lessons from The Last Listing Real Estate

    October 22, 2019

    Highest isn't always Best, Cash is King, and Other Lessons from The Last Listing Real Estate

    Highest isn't always Best, Cash is King, and Other Lessons from The Last Listing

    Posted: 22 Oct 2019 09:06 AM PDT

    Many of you have already seen most of this story, but I wanted to have it all in one place and not gloss over anything.

    My last listing was a short sale1, Because my seller had an FHA mortgage, the process starts with the bank ordering an appraisal. The bank also indicated they would accept an offer in line with appraisal, accounting for commissions2. After discussion, my seller agreed to list for the appraised price. We agreed to put the listing in the MLS on Friday morning, and review offers Monday at close of business3.

    We received a dozen offers. Every time I received one, I sent an email confirming receipt4, telling the buyers agent when to expect an answer, and asking if the buyer had been in the property5. No verbal offers were considered6.

    The offer prices ranged from 1% below list to 15% over list7. Obviously the first offer tossed was the low one. Next, at my recommendation, the seller rejected all the financed offers8. Then, all the offers where the buyers agent admitted that their client had never actually set foot in the home were rejected9. This left us with about 3 offers, and we accepted one about 12% above list. Because I am a stickler for rules and a law that is never enforced in my state, I asked my seller to print out the last page of each rejected offer, check the box saying "rejected", sign, and send it back to me10. These rejection pages were sent back to the respective buyers agents. The accepted offer closed about 35 days later.

    1. Short sale means the house is worth less than what is owed, and the bank will be "short" money at the end. Therefore the bank gets to approve the deal. They can say yes, they can say no, they can demand different terms. This process can take months! If you have a time by which you must be moved, do not consider a short sale.
    2. This was an approved short sale. The bank already knew about the seller's hardship, and said "we will take an offer that nets us $X." Note that even after all that, I didn't set the price and the bank didn't set the price: the seller set the price using information from me and the bank.
    3. Putting a 1 or 2 day deadline in your offer will be ignored. You cannot force a seller to be available to consider your offer on short notice. Sure, we know you don't have to accept a late reply, but we're pretty sure you will.
    4. I am more polite than many agents. But I know that this protects me from "I don't think the listing agent presented my offer because the final sales price was lower than my offer and she was from the same agency as that buyer's agent!! Break out the pitchforks!!"
    5. I knew what the inside of the house looked and smelled like. I knew what was obviously wrong. I did not want my seller going through the motions only to have the buyer walk in and decide they didn't want it after all! Or "well, we didn't realize obvious thing you can see from the front door so we want to renegotiate the price."
    6. Verbal offers are not binding. I can't even prove what a verbal offer said. Furthermore, a verbal offer is usually little more than a price, and that's just one line on one page of a long contract with many many blanks on it.
    7. In a hot market, a lowball is a waste of paper. Also please notice that no counter-offers were made. The only reason there would be a counter when you already have 12 offers is to clarify small points: "We like the offer but want to close a week later" or "the buyer can pay for his own home warranty."
    8. We already knew what the property would likely appraise for! Why set ourselves up for a low appraisal and a buyer expecting us to drop our price 3 weeks from now?
    9. Don't make offers before you see a house (or at least have someone you trust see it for you if you are buying long distance). Pretty pictures on the internet are no substitute for a tour.
    10. Again, proving my seller saw the offer. The law is not enforced because we had so many bank owned properties, and nobody at the bank could be bothered to hand reject the offers regardless of state law.

    Hope you all find this informative.

    submitted by /u/ShortWoman
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    [Advice] New construction - wet drywall

    Posted: 22 Oct 2019 07:35 PM PDT

    I'm having a three-story house built and everything had been going fine. However, the builder was trying to move (imo) too quickly and put up the insulation and drywall before the house was waterproofed (windows/doors were in, but shingles were incomplete). When the tropical storm blew through this weekend, we had some water enter the house. It was dripping through the ceiling on the 1st and 2nd floors. I went up into the attic and it was dry, so I'm not sure where the water was entering from.

    ​

    Here are some pictures. Not a ton of water, but water got in nonetheless and like I said, it was dripping from the ceiling (not very quickly, but still dripping).

    ​

    Here's where I need some advice: the builder says everything is fine. He proceeded with mudding up the drywall today. The day after the rain, the puddles were gone and the drywall was dry to the touch (at least the outside was). However, I'm worried a) about moisture that may have gotten on insulation in the walls (if it dripped down the walls) which would ruin the R-value and b) moisture that's still in the ceiling that may turn to mold.

    ​

    Should I be worried? Am I completely overreacting given it wasn't a huge amount of water? I'm at a loss for what to do here. Should I call the city inspectors and see if they can help? Should I demand a 3rd party come out to look (not sure what they can do now that the mudding is complete?). Should I just wait until the final home inspection and make sure my inspector checks thoroughly for mold? I don't want to overstep here because the builder could make my life hell, but I obviously want to make sure my house is safe to live in. I'd appreciate any advice. I'm freaking out a bit and I don't know if I should be or not.

    submitted by /u/kfc469
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    Closing Drama? Seller's Agent CC'ed me in a message to my Agent with no context.

    Posted: 22 Oct 2019 04:01 PM PDT

    I got this message from the seller's agent today at work. I don't have any context for what happened or what was said before this except that I said I would be flexible in allowing a rentback to the seller for 18 days after closing. So confused.

    ​

    Good Morning

    I don't understand where this is coming from, you are the first agent to be so resistant to anything flowing smoothly. Maybe you haven't had easy escrows in the past, I don't know. I have had several rent backs and never had an agent be so opposed to every easy solution. Most of the buyer's and agents are cooperative, I've even had people venmo rent backs to make it easier because we don't know exactly the last day of moving which is why I added that on the counter offer for some flexibility.

    flexibility is so important in life because, it helps us all be human and understand that everyone here is only doing what is considerate and understanding of everyone's needs. The other agent for the house she's buying is extremely on the same page. Because we are dealing with peoples lifes here and that takes a huge amount of trust that everyone is caring for everyone and have the best intentions.

    Your buyer won't be dealing with this, I usually coordinate with everyone. I've even had agents give me the number to their client so I can ask which method is easier for payment. No one is making this harder than you are, my client is a wonderful and responsible person, she would never not pay someone.

    submitted by /u/green-tea_
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    How do I find out what work was done to the house before I purchased it?

    Posted: 22 Oct 2019 02:06 PM PDT

    I bought a house in July and it's been a complete nightmare. It started almost right away when we would go to bed and the sheets felt damp all the time. The back bedroom closet had a musty smell. Then we noticed mold on our clothes in the master bedroom closet. After mold remediation, removing everything from the closet (rods, drawers, shelves, and doors) we are still having dampness issues, but we run dehumidifiers 24/7 which has solved it for now.

    We called someone to check to see if there is mold in the walls and he pointed out how in the back yard (which is all stone) there is discoloration which shows dampness and it's most likely coming from underneath the stone. There are also a couple of sections of the stone that had been clearly cut out in both corners of the back (and the neighbor behind our house confirmed) where work had been done, possibly to the sewer lines. He also pointed out that the wall on the side of the house looked like it had the bottom section (about a foot up from the ground) removed all the way. He thinks it was to check for mold.

    We have the disclosures from the previous owners which were there for 2 years and it says nothing about work in the back, work on the side of the house, or mold even though they were there for 2 years. We have the disclosure report from when they bought the house before us and there is no mention of anything either. Neither inspection report mentioned anything that I have above.

    SO, it seems like someone withheld information. It seems VERY unlikely to me that these people lived there so long and never had any issues with the mold. Is there any way to check to see if permits were requested to do the work or if the city had to check/repair the sewer lines?

    We are in LA county if that helps.

    submitted by /u/rangeles69
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    Sellers Tested Radon with a Menards Kit = 9.3 pCi/L

    Posted: 22 Oct 2019 09:13 PM PDT

    Sellers really want to sell this house. When we put in an offer they were offering to test radon and then implement a mitigation system if it was high. They sent us the test results - and it's from AccuStar 48 hour kit it looks like - comin in at 9.3 pCi/L. If we buy it should we get a more thorough test after they install mitigation?

    submitted by /u/bladsham
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    Needing Help With Contingency

    Posted: 22 Oct 2019 09:12 PM PDT

    We recently built a new house and after a month of living here have had some life changes (baby on the way, jobs etc) make us want to move closer to family.

    We had a couple of offers within two weeks. The couple we signed a contract with had a 5 day contingency period that included the approval of an in ground pool and inspection.

    On day 5 they decided the house would be too expensive for them and have backed out. Our realtor says it's okay because they are within the 5 day contingency period. Am I wrong to believe that unless the pool was denied (Approval company contacted) or the inspection was not up to par (brand new house and I would like proof the inspection states something is wrong). I am entitled as a seller to keep the earnest money? The other buyers with offers are no longer interested/have made other offers.

    Thanks so much. I'm trying to make sure I don't make myself look like an idiot.

    submitted by /u/mrwaffles1
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    Seller is asking for 50% of Ernest money due to buyer not getting financing.

    Posted: 22 Oct 2019 09:03 PM PDT

    I am the buyers realtor and we had gotten a contract accepted but about 14 days in the lender calls me and tells me the buyers credit score dropped due to some old inquiries coming up. I had a clause in the third party financing add saying that we couldn't get financing within 20 days we can cancel and still get back the earnest money check. I let the sellers agent know about it and sent them a termination of contract with the buyers signature and the lenders denial letter. The sellers agent said that their buyer deserves to get half of the earnest check because we wasted their time and lost 14 days due to financing not going through. I let the sellers agent know that wasn't going to be ok and that we were still within the 20 days agreement. I sent the title company the release earnest money form for my buyer to receive 100% of their money but I get a returned letter for only 50%. My buyers have not signed the form nor do we want to since we have the right to get the earnest back in full. It's been about a week now and they still have not signed off on getting the earnest money back. My next thought is we will need to go to mediation to come to an agreement.

    submitted by /u/toomuchtaco92
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    Advice please: Seller wants to cancel after accepted offer

    Posted: 22 Oct 2019 12:03 PM PDT

    My offer was accepted, the inspection happened and the seller agreed to fix some things. Now she just learned of liens against the house and wants to cancel the sale. She's legally bound to sell us the house, but clearly doesn't want to because she can't afford to pay off the liens prior to closing. I'm looking for advice from someone who's been in this situation or familiar with it. Should we force her to sell? In MN

    submitted by /u/roxyyyyy
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    Private mortgage: lender responsibilities.

    Posted: 22 Oct 2019 08:30 PM PDT

    Quick question for everyone. I have a private mortgage in PA. I recently tried googling what the lenders responsibilities are and seem to have come up short. I'm assuming she is required to keep track of payments and at any time provide me with a payoff amount. But other than assuming that, I can't really seem to find what the law requires from her. Thanks for any help.

    submitted by /u/thisagain776645
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    All electric condo - bad investment?

    Posted: 22 Oct 2019 01:17 PM PDT

    I'm looking into purchasing a 1 bedroom condo in Queens and the building is all electric (new construction). I heard that it might be a bad investment since the electric buildings are expensive to heat/cool. Any thoughts on this?

    submitted by /u/nycast
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    Advice requested: can this deal be done?

    Posted: 22 Oct 2019 03:00 PM PDT

    Please tell me your thoughts.

    My elderly parents want to sell the NJ house I grew up in which they've owned for fifty years (30 as an investment property as they live elsewhere ).

    The house is assessed at approx $550k value. It is a two family house with two long term tenants currently occupying both apartments ($3k and $1.7k rent). My dad recently changed insurance companies and has been told he needs a new roof or his policy will be canceled. The roof is fine but I'm sure it's at the end of its life but expectancy. It has been a rental property for a number a years and while it's in clean livable condition it has original kitchens and bathrooms from the 1970's and needs modernization.

    I live with my partner of 19 years. We have an 8 year old son. I stopped working 5 years ago to stay at home with him. Now that he's older I have begun to look for a job (and had an offer last spring but he became very ill and I had to decline) he's recovered and I'm looking again. I used to earn $200k per year at my last job where I worked for ten years. I've lived off of my savings while I've been a stay at home parent, my credit score is 750 and I have not filed taxes in five years. My partner has had the same job for 5 years and earns about $60k a year, his credit score is poor.

    So here's the deal that has been proposed.

    They will sell us the house for $400k( valued at 550k) if we can get a mortgage. We do have the 20% down payment saved but it would wipe out a good chunk of our cash.

    I don't have the details about where the tenants are within their leases but they've been there a long time and are in no hurry to leave.

    This has all been thrown at me today. My dad isn't well (early dementia) and carrying this house is stressing him out he wants it gone. If I don't accept the deal he has a buyer (our neighbor) willing to give him the full value. My dad will not consider holding the mortgage he wants to be completely absolved of anything to do with the house and fears it would harm our relationship. It wouldn't, but I'm certainly not going to argue with him. By the way I have a brother (single/no kids) who wants nothing to do with the house at all. We've considered moving back to the suburbs many times this might be a good way to do it.

    What would you do? Can I even get a mortgage In this situation? Is the rental Income helpful to convince a bank to lend to us? We don't need to live there right away, and could save for renovations while my son finishes the school year.

    Please share your advice and expertise with me. Where do we start? Is this too good to walk away from? We've never been landlords and live in a rent controlled NYC apartment.

    Thanks for reading my saga

    submitted by /u/NYCthrowaway812
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    Physician mortgage loan a good idea?

    Posted: 22 Oct 2019 06:35 PM PDT

    Hello, I'm looking to buy a house next year and wanted to ask for some opinions. I'm a first time buyer and pretty much a newbie so any insight would be helpful.

    I'm a physician and was able to pay off all my student loans so I'm currently debt-free. I saved up around 15-20% of cash for down payment of my future home (depending on the final cost).

    From my limited understanding and research so far, the mortgage rate seems to be around high 3 to low 4%.

    Since I'm able to qualify for a physician loan and not required to provide much down payment at all, I was thinking of doing this and putting my house cash into an index fund which would theoretically net me much higher than my mortgage rate of 3-4%. Then just paying off my mortgage with my income. Would you guys recommend this route?

    Or should I just go for the traditional mortgage loan (which has lower interest it seems like) and pay the 20% with no PMI and just work on paying off the house.

    I'm just trying to see which route seems more financially smarter. Thank you!

    submitted by /u/whiteorgo
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    What’s the catch with Ally mortgage rates?

    Posted: 22 Oct 2019 06:14 PM PDT

    Rates are .25 - .5 lower than best market rates elsewhere. Even with less than 20% down

    No credit pull for pre approval, just a certified letter when it goes through

    Is this a bait and switch ? What's the catch?

    submitted by /u/Rotishery
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    Books/resources on property valuation?

    Posted: 22 Oct 2019 06:11 PM PDT

    I'm interested in the economic or human perspective e.g. why/how humans choose particular homes or why some areas or types of homes increased/decreased in value.

    submitted by /u/PseudoHypebeast
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    Can someone help me understand the bindings of a WB-36 buyer agreement?

    Posted: 22 Oct 2019 05:35 PM PDT

    I signed a WB-36 agreement (in Wisconsin) with a buyers agent after I had identified a property online I wanted to pursue.

    We made an offer on that property, got it accepted, but backed out due to significant issues found during the home inspection. The property is back on the market, my earnest money has been refunded, and I'm only out the inspection fee.

    There is a term of agreement identified in the agreement. Does that only tie me to that agent on that property? Not that I foresee this happening, but if the listing agent lowers the price or came back at a later date agreeing to fix said issues on the condition report, am I still legally bound to that property and that buyers agent?

    submitted by /u/0ddb4l1
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    Selling agent will not respond to my (buyer) agent

    Posted: 22 Oct 2019 09:49 AM PDT

    There's a house I've been trying to see for the last several days. My realtor has tried to contact the selling agent multiple times but he has yet to respond to her. This morning I reached out to him directly and he texted back within 15 minutes wanting to set up an appointment. Seems very sketchy to me. Suggestions on how to respond? Do I meet with him alone to see the property and tell him I have an agent when I'm there? Should I bring my realtor with me?

    submitted by /u/lukaeber
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    Boundary hedge responsibility. How do I know if I am responsible for watering and cutting bush that separates me and neighbor

    Posted: 22 Oct 2019 04:31 PM PDT

    Hey guys,

    New homeowner here. There are bushes on either side of my house separating me and neighbors. They look more on the neighbors side of property instead of mine. How do I know if i am responsible for watering and trimming my side of the bushes?

    submitted by /u/GotPain
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    Buying land to put a full-time RV on it

    Posted: 22 Oct 2019 03:39 PM PDT

    Hi,
    I want to buy land to put my RV on where i will live in it for a few years. Is this a viable option, if so whats what i look for? any websites to search for this?

    Thanks for any assistance

    submitted by /u/GTF-Brad
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    Seller lied on disclosure- advice

    Posted: 21 Oct 2019 11:19 AM PDT

    Hello! I just was hoping to get other's opinions on this situation I'm in.

    I'm a 30-year-old teacher and first-time home buyer. I don't have a lot of money, and honestly feel like my $650 inspection fees should be reimbursed. After my offer on a house was accepted, I had an inspection done. The seller's disclosure said there had never been water damage. It rained the night before the inspection and on the day of, the basement was flooded! The inspector said that he could see on the walls that there had been water coming in for a long time. If I had known there was extensive flooding, I would not have put in an offer on this house! (The seller also said the house was all stone, but ended up being partially wood with mold, the house has termites, and they painted over mold in a closet and left the paint can in it. But in my opinion the water was the worst.)

    Should I just be glad I dodged a bullet, or should I ask for my fees back? I'm going to have to wait to look at other houses for a while, because I really can't afford $650 inspections over and over.

    Thank you so much :)

    ​

    Edit: So my agent contacted the listing agent, and the listing agent said she does not want me to send her the inspection report. She said if I send it, she won't read it. My agent said that the listing agent is doing this so she does not have to disclose in the future. This whole process has left me a little disillusioned. :/

    submitted by /u/RedSquareBlueStar
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    In escrow, house has solar PPA. Anyone have experience with this?

    Posted: 22 Oct 2019 10:37 AM PDT

    I'm in escrow for a house and waiting on the seller to disclose the solar PPA Vivint contract. All I know now is there is 15 years left. Not only would I not have chosen a PPA myself for solar, I am concerned about the cost of removing the panels when the roof needs to be replaced within the next 15 years. Also, having researched Vivint, they have terrible customer service reviews and shady business practices. The home is otherwise fantastic and the inspection came back with only minor issues, except that the roof needs some minor work and appears older. Our agent has not dealt with a PPA before. Does anyone have experience? One option is to refuse to sign the PPA contract transfer and ask that they pay off the PPA. I've searched this sub but can't find any instances of this being successful. I'm desperate for some insight from someone that has dealt with this before.

    submitted by /u/dealio
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    First time home-buyer: Buying from family (Help Requested)

    Posted: 22 Oct 2019 02:08 PM PDT

    Last time I posted here you were all SO helpful. My question on this is pretty simple so ill try to keep it somewhat brief. My family member is selling their house for a pretty low price. The thing is, it's a rather old house, no outlet or vents in the bathroom, no breaker box just the fusebox. Some of the outlets only have two prongs rather than 3. I also believe it may be in the floodplain which I may have heard means house insurance costs more?

    So what should the steps be here, like, should we get it inspected first then negotiate price later? Who should pay for what? What all do i need to do? Bear in mind that I'm working with close family so the last thing I'm trying to do is step on any toes or make assumptions but at the same time I'm investing in my future so I want to make sure I'm not going to end up with a big old turd in my lap.

    submitted by /u/FartButtCracky
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    Buying the house we are renting

    Posted: 22 Oct 2019 10:20 AM PDT

    I need some advice. Landlord has asked a few times if my husband and I would like to buy the house we have been renting for 3+ years. It is definitely not somewhere I want to live forever as it is quite small and older (built in 20s/30s,980 sq ft), 2 bed 1 bath. But it is in a decent neighborhood with nice yard space, but will definitely need some updates. It has a lot of old charm such as original door handles, crown molding, claw foot tub, subway tile in bathroom and kitchen. Cosmetic updates were done before we moved in, but a lot more could be done such as kitchen updates as our light doesn't even work, oven burner went out, old cabinets, weird layout of house, the wood flooring is splitting and looks awful, it's very cold so it would need some insulation, walls are just dirty, and I mean DIRTY (when we moved in we tried to clean them but the dirt would just spread, and a few more things to make it more functional. I am not sure how much he would be asking for (will ask when he gets Nov rent). The houses in my neighborhood are going for 300,000 (if not updated) to 630,000 (nice and new and large). House was last sold in 2015 for 199,000.

    Husband and I were wanting to buy in the next two years anyways, but I am in graduate school and wanted to wait until I start my career and can help save. We have already been pre-approved for 375,000, but where we live, we can't get what we want for that much. So we were planning to live here anyways for a couple years to save.

    If inspections came back fine, what is the most I should buy this for? Would it be worth it if it was under 250,000? The rental market here is insane.. 1800 for a one bedroom apartment. Housing is finally starting to level, but the market is still hot..

    submitted by /u/hibecca
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    New apartment development

    Posted: 22 Oct 2019 01:32 PM PDT

    So i want to build an apartment complex that my business will own. I am going to sell piece of my business (all it owns is the apartment complex) to other investors. I will own 55% they wil own 45% as of now there are 5 people splitting the 45%. I will be putting up 55% of the capital from personal funds.

    I will have a property management company that will handle the properties daily needs like leasing, showing, repairs, but i will be the one that handles correspondence with the management company, pays the bills, my credit is used for the loans, basically im the guy heading it up while everyone else is just a capital investor.

    What should i charge them (the other investor) for handling all of this for them? Is their a standard rate? Should i even charge them? What is fair?

    submitted by /u/jrick526
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    Circumstances where seller would bring cash to the table?

    Posted: 22 Oct 2019 01:30 PM PDT

    Long story short, I have been interested in a home in my fiance's neighborhood (suburban Chicago) listed for 300K. It's been sitting on the market for over 90 days with no price adjustments. It's a nicely remodeled bungalow, but rather small, and I believe the fair market value to be closer to 250.

    After viewing the home with my agent this past week and suggesting that I would place an offer for ~250 (I have pre-approval financing sorted), my agent had informed me that the seller still owes ~$300K and that I would essentially be wasting my time. The seller did purchase the home 2 years ago for 325K.

    Can anybody think of a situation where my offer would make sense and the seller would entertain it? Or, should I continue looking for something else.

    Thanks in advance!

    submitted by /u/BigNuclearButton
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    In what situation would having a rental property in an LLC actually protect you from a lawsuit?

    Posted: 22 Oct 2019 01:20 PM PDT

    I'm aware that LLCs don't actually protect landlord's personal assets from lawsuits if someone can make a reasonable claim that you're personally responsible for their injury or whatever bad thing happened to them. So if someone steps on a nail in your property's yard, or trips on a broken step, they can just name you as personally negligent and sue you directly, regardless of the property being in an LLC.

    But that makes me wonder, are there any situations where having a rental property in an LLC really would protect a landlord's personal assets from lawsuit claims? What's an example of a situation where an LLC actually might offer some kind of protection?

    submitted by /u/thbt101
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