Looking for real estate

[mwalsh9152]

Zillow new listings that I get are always the same ones that my realtors search provided the day before

 

[mwalsh9152]

so it just keeps getting better for home buyers. I went to an open house on Sunday, again in Georgetown. The house was perfect, best Ive seen in a while. I offered asking price with 30% down, and I didnt even come close to being considered. I was told that the winning bid was significantly above asking price. There were also 8 other offers besides mine!


I gotta say though, its nice to be able to hear Georgetown Fish and Game from all over town!

 

[milktree]

so it just keeps getting better for home buyers. I went to an open house on Sunday, again in Georgetown. The house was perfect, best Ive seen in a while. I offered asking price with 30% down, and I didnt even come close to being considered. I was told that the winning bid was significantly above asking price. There were also 8 other offers besides mine!


I gotta say though, its nice to be able to hear Georgetown Fish and Game from all over town!

"asking price" is just a starting point for any "hot" property. My girlfriend and I looked a lot of houses that went for 10s of thousands over asking.

The low asking price isn't a "I will sell at this price", it's a "start the bidding low, but not too low" price.

Unless it's an oddball house that's been on the market a while and has "features" that some people wouldn't understand.

The house we (will have, when we close) got had been on the market for over two months (an eternity in this business) and we still payed a little over asking.

 

[Mr.E]

so it just keeps getting better for home buyers. I went to an open house on Sunday, again in Georgetown. The house was perfect, best Ive seen in a while. I offered asking price with 30% down, and I didnt even come close to being considered. I was told that the winning bid was significantly above asking price. There were also 8 other offers besides mine!


I gotta say though, its nice to be able to hear Georgetown Fish and Game from all over town!

I've just started dipping my feet in the home buyer pool. Stories like these make me want to stay a renter...but that sucks even more.

 

[mwalsh9152]

Ive offered below, above, and at asking price on numerous homes, case by case basis as to what I think its worth.

To offer asking price on this, I had to go 20K over my comfort limit, I thought this one was a safe bet though. I was hoping that a 30% down payment might make me lucky. Just about every home Ive put an offer on had a few other bidders, but I wasnt expecting 8 more!

At this point, I'm gonna back off and hope that spring brings a bit more inventory. I'll keep looking, but Im not gonna over pay just to buy something right now.

 

[rivet_42]

The more I look, and the more I think about it, the more I think the right thing to do is to get out of the Boston area entirely, and find another career, one that doesn't require that I live near some exorbitantly-priced tech hub like Boston or NYC or the SF Bay area to find work.

 

[dragonballzz]

Ive offered below, above, and at asking price on numerous homes, case by case basis as to what I think its worth.

To offer asking price on this, I had to go 20K over my comfort limit, I thought this one was a safe bet though. I was hoping that a 30% down payment might make me lucky. Just about every home Ive put an offer on had a few other bidders, but I wasnt expecting 8 more!

At this point, I'm gonna back off and hope that spring brings a bit more inventory. I'll keep looking, but Im not gonna over pay just to buy something right now.

Somebody please correct me if I'm wrong but I dont think the down payment ammount matters to the seller, it only matters to your lender.

 

[milktree]

Somebody please correct me if I'm wrong but I dont think the down payment ammount matters to the seller, it only matters to your lender.

You're wrong.

A larger down payment matters because it indicates that the buyer is more likely to be able to go through with the purchase.

If the lender's appraiser says the house is worth less than selling price (hot market, special to the buyer, whatever) the bank can refuse to make the loan, which means either the sale is killed or the buyer and seller have to re-negotiate for a lower price. The former is bad because time is money, and a re-listing makes the house less appealing to subsequent buyers. (it's stupid, but that's the way psychology works)

If a buyer only puts 3% or 5% down, it means they don't have a lot of cash, which looks bad for lenders, so they might not get the mortgage. See above.


I'm pretty sure the difference between 20% down and 30% down is insignificant, but the difference between 10% and 20% is huge.

 

[OldeBD]

Somebody please correct me if I'm wrong but I dont think the down payment ammount matters to the seller, it only matters to your lender.

Correct, it only matters if your a cash buyer that can close quickly to the right seller.

- - - Updated - - -

You're wrong.

A larger down payment matters because it indicates that the buyer is more likely to be able to go through with the purchase.

If the lender's appraiser says the house is worth less than selling price (hot market, special to the buyer, whatever) the bank can refuse to make the loan, which means either the sale is killed or the buyer and seller have to re-negotiate for a lower price. The former is bad because time is money, and a re-listing makes the house less appealing to subsequent buyers. (it's stupid, but that's the way psychology works)

If a buyer only puts 3% or 5% down, it means they don't have a lot of cash, which looks bad for lenders, so they might not get the mortgage. See above.


I'm pretty sure the difference between 20% down and 30% down is insignificant, but the difference between 10% and 20% is huge.

Thats a good point. Personally I wouldn't buy a house for more than it's worth.

 

[dragonballzz]

You're wrong.

A larger down payment matters because it indicates that the buyer is more likely to be able to go through with the purchase.

If the lender's appraiser says the house is worth less than selling price (hot market, special to the buyer, whatever) the bank can refuse to make the loan, which means either the sale is killed or the buyer and seller have to re-negotiate for a lower price. The former is bad because time is money, and a re-listing makes the house less appealing to subsequent buyers. (it's stupid, but that's the way psychology works)

If a buyer only puts 3% or 5% down, it means they don't have a lot of cash, which looks bad for lenders, so they might not get the mortgage. See above.


I'm pretty sure the difference between 20% down and 30% down is insignificant, but the difference between 10% and 20% is huge.

Good point. Thanks.

 

[dragonballzz]

Correct, it only matters if your a cash buyer that can close quickly to the right seller.

- - - Updated - - -



Thats a good point. Personally I wouldn't buy a house for more than it's worth.

It's worth what somebody is willing to pay.

 

[MAGA99]

Sold house in MA, in very green town, to move to NH. Wow, way cheaper guns and ammo, and no worry about storage, transport, etc!!

There is nothing wrong with telling your realtor you're a gun owner/sportsmen. It may actually be to your advantage as they won't show you some dump that you can't store any toys at or can't shoot guns in your back yard....well, maybe you aren't looking in the right area to be shooting in your back yard, but they can atleast take your wants into consideration when considering a place. Telling your realtor you absolutely hate a certain property and why will work to both your benefit, and theirs as they can eliminate similar unsuitable places.

P.S. good luck, moving SUCKS, but hopefully it will be worth it!!

 

[OldeBD]

It's worth what somebody is willing to pay.

Very true!

 

[milktree]

Thats a good point. Personally I wouldn't buy a house for more than it's worth.

How do you know what it's worth? It's not like you can look at eBay past sales for the same house.

The point is that it doesn't matter what it's worth, it matters what *the bank* thinks it's worth. The two might be different for good or bad reasons: Sometimes people get so frustrated by not finding a house, or by being outbid, that they pay too much. Sometimes the buyer can see a huge investment opportunity the bank can't.

And, what it's worth *to you* is not the same as what the bank could reasonably get for it should they need to foreclose and sell.


Banks don't want to finance more than 20% of the value, and if they do, they charge a fee (PMI). Also, the buyer's mortgage promise might be dependent on financing only a certain percentage.

 

[Realtor MA]

"asking price" is just a starting point for any "hot" property. My girlfriend and I looked a lot of houses that went for 10s of thousands over asking.

The low asking price isn't a "I will sell at this price", it's a "start the bidding low, but not too low" price.

Unless it's an oddball house that's been on the market a while and has "features" that some people wouldn't understand.

The house we (will have, when we close) got had been on the market for over two months (an eternity in this business) and we still payed a little over asking.

If you're in a multiple bid situation and you're offering asking price you probably have a 1% chance of getting the house. And by 1% I really mean 0%
Just wondering why you would pay more than asking for a house that's been on the market two months???

 

[OldeBD]

How do you know what it's worth? It's not like you can look at eBay past sales for the same house.

The point is that it doesn't matter what it's worth, it matters what *the bank* thinks it's worth. The two might be different for good or bad reasons: Sometimes people get so frustrated by not finding a house, or by being outbid, that they pay too much. Sometimes the buyer can see a huge investment opportunity the bank can't.

And, what it's worth *to you* is not the same as what the bank could reasonably get for it should they need to foreclose and sell.


Banks don't want to finance more than 20% of the value, and if they do, they charge a fee (PMI). Also, the buyer's mortgage promise might be dependent on financing only a certain percentage.

No I dont use ebay, even though you probably could along with anyrealtor web site, to search sale history as well as what comparable properties have sold for. I'm a strong believer in not owning the most expensive property on the street. Buy low and sell high guy.

No it does matter what its worth if you had to sell it in a worst case scenario to save your ass. If the bank wont give you a loan without a 30% dp or you have to buy mortgage insurance thats a stupid buy in MY book. At the end of the day it's just a house, there will always be that one you wished you bought instead. It's your money, spend it how you like.

 

[mwalsh9152]

Several years ago, I put an offer on a short sale in Salem NH. I went a shade over asking price, and didnt end up getting it. They took an offer that was less than mine because they had a substantially higher down payment than I did. At the time I only had 5%

Just like a custom used vehicle, at the end of the day, a house is worth what someone is willing to pay. Because not only town by town, values can vary street by street too. Not only are you factoring in the value of the property you are looking at, you need to factor in the neighbors too! The house I offered on this weekend, was on a pretty decent street, but this house was book ended by the two worst houses on the street. Every time you walk out your front door and walk towards the driveway, you are looking at a garage that is literally falling down. I dont want to pay a premium for that privilege

 

[milktree]

If you're in a multiple bid situation and you're offering asking price you probably have a 1% chance of getting the house. And by 1% I really mean 0%
Just wondering why you would pay more than asking for a house that's been on the market two months???

Bad timing, they had another active offer at the same time. i.e. we weren't on our game (shoulda gotten there sooner) and we really like the house.

We only paid $2,500 over asking, so it's not like it's *that* crazy. (I hope

 

[milktree]

No I dont use ebay, even though you probably could along with any realtor web site, to search sale history as well as what comparable properties have sold for.

Right, that's what the bank's appraiser does.

That doesn't change the "what it's worth do you" vs. "what the bank thinks it's worth" equation.

No it does matter what its worth if you had to sell it in a worst case scenario to save your ass. If the bank wont give you a loan without a 30% dp or you have to buy mortgage insurance thats a stupid buy in MY book. At the end of the day it's just a house, there will always be that one you wished you bought instead. It's your money, spend it how you like.

You misread me. Banks charge PMI if your loan is greater than 80% of what they think the house is worth, *not* 80% of the sale price.

They'll give 90% and even 97% loans, but they charge you for it in the form of higher rates and PMI.

so, if you put down 30%, the bank won't charge PMI and they'll almost certainly approve the loan, even if the appraiser thinks its worth less than the sale price.

 

[Varmint]

Peabody is now green, it might appear red on your sheet. Very convenient to Boston, cheap electricity (they have their own plant), and low property tax.

 

[mwalsh9152]

Bad timing, they had another active offer at the same time. i.e. we weren't on our game (shoulda gotten there sooner) and we really like the house.

We only paid $2,500 over asking, so it's not like it's *that* crazy. (I hope

I missed out on one for the same thing. It had been on the market for a few months, but the day my wife found it they just happened to receive an offer on it. We put an offer on it as well, and then the last people to view it that night also put an offer on it. Had I found it a week sooner, I likely could have got it for my 10K under offer. It needed a kitchen, and thats the only way I could make the numbers work.

 

[Realtor MA]

Here is some language that I include in my 'opinion of value' letters.

For the purpose of clarity, we set forth herein the definition of Fair Market Value: as being the highest price in terms of money that a property will bring if exposed for sale in an open market, allowing a reasonable time to find a purchaser, buying with a full knowledge of all the uses to which it is adapted for, and for which it is capable of being used and without undue stimulus to buy or sell.

FYI I would not consider a bidding war as undue stimulus and I would argue that a bidding war results in fair market value.

 

[mikerossi1976]

Burlington is a very green town and we're convently located between The MRA and The Woburn Sportsman Club. Plus ya can't beat our property taxes

 

[NH_Realtor]

You misread me. Banks charge PMI if your loan is greater than 80% of what they think the house is worth, *not* 80% of the sale price.

They'll give 90% and even 97% loans, but they charge you for it in the form of higher rates and PMI.

so, if you put down 30%, the bank won't charge PMI and they'll almost certainly approve the loan, even if the appraiser thinks its worth less than the sale price.

From what my lenders tell me this cannot happen, has to be at or above contract price. I could be wrong. However on the flipside I've seen more than one appraiser come in with a valuation of literally $1 above contract price.

Adding on to this and the down payment discussion, rural development loans can be done with 0% down and actually has one of the lowest PMI's out there. FHA can be done with 3.5% down. Usually in both of those financing situations the buyer will be asking for closing costs as well, so let that one sink in for a minute. You can purchase a home with about $1000 or less to cover inspections and a few other things that can't be paid for out of closing costs. The day you purchase the home you are immediately underwater on the value and more than likely you wouldn't be able to sell it for at least 5 years to cover closing costs on the sellers end. Also with an FHA loan PMI never goes away for the life of the loan. Once you hit 20% ltv you have to refinance to get rid of the PMI.

Both of these programs are government backed programs and therefore they have much more stringent guidelines when it come's to the appraisal like no chipping or peeling paint, no obvious safety or health hazards, if it's on a well the water has to be tested, etc. The government has actually made those appraisal standards even more stringent in the last few months.

You need at least 5% down to get into a conventional loan program, 10 - 20% is better.

From a sellers prospective the down payment makes a huge difference to the deal, because if the house won't pass FHA or RD guidelines it ain't gonna get financed and you're back to square 1.

Of course all of this is why people DO need Realtor's, because we have to know this shit and have everyone prepared before TSHTF. When TSHTF 99% of people (not NES'rs of course) get emotional and stop thinking rationally. That's how deals die that shouldn't. Keep in mind I'm a realtor and I can't stand 90% of the agents out there that I deal with on a daily basis, I'm sure Realtor MA can attest that there are a lot of morons out there with licenses that should be waiting tables instead.

 

[Rob Skully]

Not sure if you are still looking but it seems I do not see
any interest out where I live ... PEPPERELL
I commute to South Boston every day.
I drive to Alewife and take the T
There is commuter rail that goes from Leominster or further
right into South Station if you don't want to drive.
All GREEN cities out this way ..
Rob ...

 

[rivet_42]

Not sure if you are still looking but it seems I do not see
any interest out where I live ... PEPPERELL
I commute to South Boston every day.
I drive to Alewife and take the T
There is commuter rail that goes from Leominster or further
right into South Station if you don't want to drive.
All GREEN cities out this way ..
Rob ...

That really sounds like a pretty brutal commute. The car portion is nearly an hour under good traffic conditions, and then 20-30 minutes on the Red Line on top of it? Yikes.

 

[dcmdon]

From what my lenders tell me this cannot happen, has to be at or above contract price. I could be wrong. However on the flipside I've seen more than one appraiser come in with a valuation of literally $1 above contract price.

You are wrong.

Lets say the appraiser says the house is worth 100,000.

Then the bank won't write a mortgage for more than an 80% loan to value (LTV) ratio. Or $80,000.

They could not care less if you pay $200,000 for the house. As long as the loan is not for more than 80% of the APPRAISED value.

More realistically, what is happening now is someone signs a P&S agreement for a house for $500k. The appraisal comes in at less, lets say $400k. At that number, the bank won't write a note for more than a bit over $300k.

So if you have 200K to put down, then the note won't exceed $300k and the fact that the selling price is more than the appraised price is irrelevant.

I hope this makes sense. Bottom line is its all about the LTV.

Don

 

[NH_Realtor]

You are wrong.

Lets say the appraiser says the house is worth 100,000.

Then the bank won't write a mortgage for more than an 80% loan to value (LTV) ratio. Or $80,000.

They could not care less if you pay $200,000 for the house. As long as the loan is not for more than 80% of the APPRAISED value.

More realistically, what is happening now is someone signs a P&S agreement for a house for $500k. The appraisal comes in at less, lets say $400k. At that number, the bank won't write a note for more than a bit over $300k.

So if you have 200K to put down, then the note won't exceed $300k and the fact that the selling price is more than the appraised price is irrelevant.

I hope this makes sense. Bottom line is its all about the LTV.

Don

None of this makes sense. It is all loan program dependent, unless in your area all banks require a 20% down payment which is absolutely absurd to me. Again FHA and RD require as little as 3.5% to 0% down if the property will pass appraisal guidelines.

The bank has no authority or ability to change the buyers down payment after the contract terms are written. The contract price can and must re-negotiated based on a "fair market appraisal" in this hypothetical situation or there is no deal, but no one can mandate that a buyer must come up with a 25% down payment based on an appraisal. Any bank or loan officer in this situation would adjust the loan program to fit the buyer, which would change the down payment based on what the consumer (buyer) actually has available for funds. Much of what you are talking about is why TRID has been put into place.

Are you a loan officer or do you work at a bank or am I missing something here?

 

[Realtor MA]

Somebody please correct me if I'm wrong but I dont think the down payment ammount matters to the seller, it only matters to your lender.

The higher the downpayment(on a percentage basis) the easier it it to qualify for a loan. This also makes it less likely that there will be a glitch because of the appraisal.

From what my lenders tell me this cannot happen, has to be at or above contract price. I could be wrong. However on the flipside I've seen more than one appraiser come in with a valuation of literally $1 above contract price.

Adding on to this and the down payment discussion, rural development loans can be done with 0% down and actually has one of the lowest PMI's out there. FHA can be done with 3.5% down. Usually in both of those financing situations the buyer will be asking for closing costs as well, so let that one sink in for a minute. You can purchase a home with about $1000 or less to cover inspections and a few other things that can't be paid for out of closing costs. The day you purchase the home you are immediately underwater on the value and more than likely you wouldn't be able to sell it for at least 5 years to cover closing costs on the sellers end. Also with an FHA loan PMI never goes away for the life of the loan. Once you hit 20% ltv you have to refinance to get rid of the PMI.

Both of these programs are government backed programs and therefore they have much more stringent guidelines when it come's to the appraisal like no chipping or peeling paint, no obvious safety or health hazards, if it's on a well the water has to be tested, etc. The government has actually made those appraisal standards even more stringent in the last few months.

You need at least 5% down to get into a conventional loan program, 10 - 20% is better.

From a sellers prospective the down payment makes a huge difference to the deal, because if the house won't pass FHA or RD guidelines it ain't gonna get financed and you're back to square 1.

Of course all of this is why people DO need Realtor's, because we have to know this shit and have everyone prepared before TSHTF. When TSHTF 99% of people (not NES'rs of course) get emotional and stop thinking rationally. That's how deals die that shouldn't. Keep in mind I'm a realtor and I can't stand 90% of the agents out there that I deal with on a daily basis, I'm sure Realtor MA can attest that there are a lot of morons out there with licenses that should be waiting tables instead.

I concur! I have had a few deals where the buyers had to put more money down in order to satisfy the bank as a result of a low appraisal. Had a multiple offer situation today and I was asking all of the buyer agents to include language in their offers that required the buyers to make up any difference in down payment if there was an appraisal issue. Offers were 50 and 60 grand over on a 525 house so there is a good chance it won't appraise.

You are wrong.

Lets say the appraiser says the house is worth 100,000.

Then the bank won't write a mortgage for more than an 80% loan to value (LTV) ratio. Or $80,000.

They could not care less if you pay $200,000 for the house. As long as the loan is not for more than 80% of the APPRAISED value.

More realistically, what is happening now is someone signs a P&S agreement for a house for $500k. The appraisal comes in at less, lets say $400k. At that number, the bank won't write a note for more than a bit over $300k.

So if you have 200K to put down, then the note won't exceed $300k and the fact that the selling price is more than the appraised price is irrelevant.

I hope this makes sense. Bottom line is its all about the LTV.

Don

All true except that they'll do a loan with a smaller down payment but it might result in a higher rate.

 

[NH_Realtor]

I concur! I have had a few deals where the buyers had to put more money down in order to satisfy the bank as a result of a low appraisal. Had a multiple offer situation today and I was asking all of the buyer agents to include language in their offers that required the buyers to make up any difference in down payment if there was an appraisal issue. Offers were 50 and 60 grand over on a 525 house so there is a good chance it won't appraise.

Good problems to have, I don't get those on the $50K mobile homes in my area!!