patrick.net

Al_Sharpton_for_President says

clambo says

"bargain beach house" on HGV

It’s completely staged. It’s bascially promotional videos masquerading as “entertainment.” The sheeple drool and consume.

I watched that show, but always considered it to be for entertainment value.

Bitcoiner says

71% of owners in CA have a locked in 30y rate of below 4%. Where am I going to live if I sell my house?

Current trends suggest someplace outside of California..

Bitcoiner says

And people don’t sell their house to rent and time the market to buy back in.

Yes, I would assume this is true but, image selling in 08 and buying back into the market in 2010/2011. Also, ask Wookie (I think he will agree), the best position when buying, imo, is when you do not currently own or need to sell.

During the GFC, the distressed sales were due to buyers who bought with NINJA loans. It'll be interesting to see where the distressed inventory comes from in the next downturn.

GNL says

Also, ask Wookie (I think he will agree), the best position when buying, imo, is when you do not currently own or need to sell.

That's the problem with renting. It's actually worse than owning mobility wise now that you brought it up. Best rates renting wise are 12 months or longer. Life happens. You can keep the house if you own and sell later and move NOW. You can't do that unless you have a mo/mo lease. Owning is probably more flexible the more and more I think about it. Just never have had to articulate it because I never think about renting.

I know I'll do snow bird rentals in retirement years. Maybe own and see what I can get for rent in the off season in the Caribbean (hurricane season). It's simply illogical to be renting in retirement years. At minimum my goal by 45 is to own my primary and a retirement/vacation condo on St. John or St. Thomas. Once we get the house done here in IL I give no fucks about credit. I'll own in the Caribbean. If I lose it, who gives a shit. My bank? Fuck them. If it works out, vacationers pay it off and at 60 I do winter in USVI and Summer by family in IL. We'll have a 4/4 here in IL and was thinking 2/2 down there.

Beauty of USVI is we don't compete with CA people. NY people go to FL. FL people go to the Bahamas. It's expensive, but you can still get a reasonably priced condo for the location. I wouldn't need 3 beds, but this for example: https://www.usvirealestate.com/search/homes-for-sale/613-&-614-nazareth-rh-st-thomas-00802-23-789-75109/ When available a 2/2 is $500k I believe. On the beach and minutes to Red Hook to get over to St. John.

And yes, USVI is rough around the edges being an island. Or Puerto Rico. This is easy to rent for $2k/wk. https://www.realtor.com/realestateandhomes-detail/Calle-Higuero_Rio-Grande_PR_00745_M97917-10954 More affordable. Not as sexy, but there are decent beaches nearby. Tax incentives if you're still working. Water storage and back up electric are a must. But it's still an amazing country/territory (maybe state eventually) with all it's flaws.

Bitcoiner says

Brand new condo 2b/2b for 320k sounds cheap to Californians…..Which city is that?

Brevard county. The Condo isn't $320, it's a brand new SFH for $380k, builder pays closing costs.

socal2 says

This small house sold for $1.7MM in my neighborhood a few months ago. Crazy - even for Carlsbad IMO.
https://www.zillow.com/homedetails/6432-Cayenne-Ln-Carlsbad-CA-92009/16657407_zpid/

I know the original owner (old widower who has lots of lady friends) who sold for $1MM. I was surprised when flippers bought it last July and spent half a year upgrading it. I figured they were going to lose their shirt in this market but they got over asking!

@socal2,

The flipper took the risk and got awarded. Buyers likely thought it was the start of a downturn, which was reasonable, stayed on the sidelines, only to see inventory gradually dwindled and the housing market recovered. Simply crazy with high price real estate and high mortgage interest if we think about it.

Why isn't my house selling?
https://www.reddit.com/r/REBubble/comments/140ggf5/why_isnt_my_house_selling/
https://www.reddit.com/r/RealEstate/comments/13zxzhb/why_isnt_my_house_selling/

Homes in northern Virginia sell fast. So fast that more and more agents don't even bother with photography.

Bitcoiner says

People also need to understand that what happened in the 2000’s is not going to repeat. No NINJA loans, no stated income, no arm loans, no foreclosure tsunami etc. there is a reason why you had 4M active listings right before 08.

Never say never, at least within a 60-year time frame, enough for those who learned the bitter speculation lesson to retire/die off so a new generation of politicians and financial grifters can re-invent the scam. Case in point - the reforms issuing from the Pecora Commission in the 1930's that did away with many of the financial scams contributing to the great depression (incidental, but not causal - that was the Fed first having banks call in margin loans and then decreasing the money supply by 30% between 1929 and 1933 - see The Money Masters) were undone in the early naughties by Greenspan and gang. Brooksley Born, who identified derivatives (CDO's CDO^2) as a ticking time bomb akin to bucket shops common in the 1920's was ridden out of town on a rail. A few years later - voila, meltdown.

Santayana said it most eloquently - those ignorant of history are doomed to repeat it. "The Big Short" should be mandatory viewing for all young adults, especially because it has a pre-wall Margot Robie naked in a bubble bath.

https://www.reddit.com/r/RealEstate/comments/13zem7a/house_closes_on_629_my_job_is_rescinding_my/

House closes on 6/29. My job is rescinding my remote work agreement. Am I legally obligated to continue with the sale of my house?

zzyzzx says

https://www.reddit.com/r/RealEstate/comments/13zem7a/house_closes_on_629_my_job_is_rescinding_my/

House closes on 6/29. My job is rescinding my remote work agreement. Am I legally obligated to continue with the sale of my house?

What is the purpose of this story?

zzyzzx says

House closes on 6/29. My job is rescinding my remote work agreement. Am I legally obligated to continue with the sale of my house?

Didn't read everything. Contracts can be broken. This sounds like a seller that didn't have his house in order. I've been at closings that went to shit sitting there. Guess what, you can get out of any contract there just might be fees. I've been at closings where there's verbal altercations between all the parties. Pleasant.

Guy sounds like a dip shit because he didn't ask his employer about WFH over the long term and that he was selling his house. Other thing is don't move if you're not willing to lose your job if it's too far away. Always have back up employment at the new location if it's out of state. If he was an asset to the company they would have made it work. He clearly wasn't. So again, dip shit.

Bitcoiner says

Scottsdale is the Beverly Hills of Az.

A bit of an exaggeration. Been there many times, and while there are many nice gated communities, there are also unremarkable houses as well.

WookieMan says

Guy sounds like a dip shit because he didn't ask his employer about WFH over the long term and that he was selling his house.

I'm witnessing an employer flat-out rescinding on the promise of "WFH forever if you want it" as we speak, while also closing offices in several locations. Anybody who asked back then got the above quoted answer which sounded pretty long-term.

Al_Sharpton_for_President says

A bit of an exaggeration. Been there many times, and while there are many nice gated communities

Scottsdale is a conundrum in the Phoenix regional area. I actually think Bitcoiner is right on this though. It's a large area, so of course there will be cheaper houses within municipal boundaries. There is no ghetto or nasty area though.

You're not getting in under $500k in Scottsdale for a 3/3. Gain access to the gated communities. Desert Mountain. You aren't coming out without a million dollar loan or cash out of pocket. I don't even know what HOA dues are either. My uncles home is probably $17M if he sold today. He owns two of my cousins houses in Phoenix.

Beverly Hills is kind of a valid comparison. No there aren't 9 figure houses, but it's flipping expensive as hell to get in. 7-8 figures in the best spots.

WookieMan says

Guess what, you can get out of any contract there just might be fees.

Please explain this further.

Scottsdale, AZ Zillow search.

Up to $500,000 - 2 homes

$500,000 - $600,000 - 6 homes

$600,000 - $700,000 - 32 homes

4 bed, 2 bath, 2,331 sq. ft. $539,000: https://www.zillow.com/homedetails/16638-E-Creosote-Dr-Scottsdale-AZ-85262/59264407_zpid/

gabbar says

WookieMan says

Guess what, you can get out of any contract there just might be fees.

Please explain this further.

Could be no fees or you might get sued. I've seen it happen a dozen of times at closing a buyer is all a sudden like "I want x, y, z." You just walk away. That wasn't agreed to, it's not in the contract. There are so many scenarios.

Remember that Realtor contracts are written by attorneys. They want work. A new series of contract paperwork came out for CAR (Chicago Association of Realtors). It's been 6 years, but it was something like "if permits were not pulled the seller is held liable for work performed...." blah blah. These are 10-12 page contracts with 8 point font. Sooooooo much shit can be thrown in there. We'd cross that line out and initial before sending back to the buyer. Protects the seller if a previous own did shit. The attorneys WANT problems so they get more money.

The way it was phrased was ALL previous owners. So if someone before you did some hack job wiring, it's now on you. No proof, but I'm pretty sure I was the first one to catch it when it came out. The attorneys all knew it. They knew brokers were lazy and can barely do basic math. Let alone understand a contract beside the blanks they "let" you fill in that they get paid to review. 90% of our contracts we crossed out tons of shit on the standard contract. It honestly was a pain in the ass. Had to make sure both parties initial any and all changes. Attorneys didn't like us.

Disclosures are the worst enemy for a seller. There's nothing stopping a seller from cancelling because their mom got cancer and they need to stay put and help her live. Return the earnest money. They "might" sue, but they're not going to get much if anything. There has to be a reason, but RE contracts are broken all the time. Disclosures are what you'll get sued for. Not breaking the contract. We only almost got sued once and that was because my moron boss advising the client to lie about water issues. House flooded the first week, they talked to the neighbor and they said it always flooded and so does there. Settled out of court for $15k and seller paid $15k to have a proper sump and french drain system installed.

That should be your biggest concern. Be upfront. Like I mention with the permit terms. If a guy from the 90's did un-permitted work on the house, why is that my problem. Scratch it out and explain why. You just don't know on any 30-150 year old house. I do think they updated the contract after that.

Al_Sharpton_for_President says

Scottsdale, AZ Zillow search.

Up to $500,000 - 2 homes

$500,000 - $600,000 - 6 homes

$600,000 - $700,000 - 32 homes

4 bed, 2 bath, 2,331 sq. ft. $539,000: https://www.zillow.com/homedetails/16638-E-Creosote-Dr-Scottsdale-AZ-85262/59264407_zpid/

TL:DR - You found the ghetto of Scottsdale which isn't an actual ghetto and it's $500k plus generally.

That's not cheap in flyover country, hell most the country. Scottsdale is expensive as balls. You're searching a section I haven't been to, but Scottsdale is rather large. Go look in Desert Mountain just north of your link. That's the Scottsdale I know. My uncles neighbor is an extremely successful Hollywood person that has a popular franchise that did very well. Their house is shittier.

Here's a house down the road from my uncles place: https://www.zillow.com/homedetails/11301-E-Honey-Mesquite-Dr-Scottsdale-AZ-85262/94638060_zpid/

My uncles house beats the living shit out of that one. Maybe it won't sell. But when Bitcoiner says it's the Beverly Hills of AZ I tend to agree. Most his neighbors are prominent people.

I'll probably do a golf trip out there again in January '24. I'll see if I can head over there with the guys, snap some photos. He's super religious though and some of my buddies will rub him the wrong way (weed/drinking). So it's a hit or miss that it happens. I haven't seen him since my dad died in 2019 and I've been to Phoenix area a few times. He's hitting 70 now and had prostate cancer, but is doing well. 2 of my cousins live out there as well that I haven't seen in a decade. I'm not the best family person. Just focused on my own house. Oxygen mask.

When in Scottsdale, do stop in to Chompie’s.

https://chompies.com/chompies-scottsdale/

https://www.dailymail.co.uk/news/article-12162843/Potential-time-bomb-economy-looms-1-5-trillion-real-estate-mortgages-come-due.html

Potential 'time bomb' for US economy looms as $1.5 trillion in real-estate mortgages will come due within the next two years
Some $1.5 trillion in mortgages will come due in the next two years - paving the way for a financial crisis as higher interest rates push down property values
As this event looms, big banks such as Wells Fargo are cutting their losses by preparing to offload debts at a discount even when borrowers are up to date
The phenomenon has been further compounded by office vacancies, as a sizable amount of Americans continue to work from home even after the pandemic

Patrick says

As this event looms, big banks such as Wells Fargo are cutting their losses by preparing to offload debts at a discount even when borrowers are up to date

Thank you for sharing, Patrick.

WF emailed me a notice about changes in their agreement this week, to go into effect in July. Buried way down in the bottom of many pages of legaleze was a summary of the newly imposed withdrawal limits (of the depositors' own money! )

For retail customers, a limit of $50k per withdrawal. For business customers, the limit is $10K.

Looks like they want some stops in place to prevent a First Republic kind of large-depositor stampede.

WookieMan says

Remember that Realtor contracts are written by attorneys. They want work. A new series of contract paperwork came out for CAR (Chicago Association of Realtors). It's been 6 years, but it was something like "if permits were not pulled the seller is held liable for work performed...." blah blah. These are 10-12 page contracts with 8 point font. Sooooooo much shit can be thrown in there. We'd cross that line out and initial before sending back to the buyer. Protects the seller if a previous own did shit. The attorneys WANT problems so they get more money.

Thank you, are these contractors deliberately written to give the upper hand to brokers, real estate agents and banks?

WookieMan says

Guess what, you can get out of any contract there just might be fees.

Yes, like loss of earnest money, which around here is 1% of the asking price. On a $500k home, you just lost $5,000.

B.A.C.A.H. says

Patrick says

As this event looms, big banks such as Wells Fargo are cutting their losses by preparing to offload debts at a discount even when borrowers are up to date

Thank you for sharing, Patrick.

WF emailed me a notice about changes in their agreement this week, to go into effect in July. Buried way down in the bottom of many pages of legaleze was a summary of the newly imposed withdrawal limits (of the depositors' own money! )

For retail customers, a limit of $50k per withdrawal. For business customers, the limit is $10K.

Looks like they want some stops in place to prevent a First Republic kind of large-depositor stampede.

Seriously, why does anyone still do business with WF, BofA, Chase, US Bank, or any of the other big banks?

Regional Credit Unions are where it’s at.

https://www.reddit.com/r/RealEstate/comments/142zj3h/how_much_of_my_130k_earnest_money_will_i/

How much of my $130k earnest money will I potentially lose if I decide to pull out of a home purchase deal in New Jersey?

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/142ifbp/massive_tax_increase/

I noticed our escrow payment nearly doubled from $750 to ~1500 and the bank says it’s because our taxes jumped from ~6,500 to 10,000. Am I just screwed or is there someone to contact for a clear answer on why they jumped?

zzyzzx says

How much of my $130k earnest money will I potentially lose

$130k in earnest money? Earnest money is typically 1% of the asking price. He is buying a home worth $13 million?

HeadSet says

zzyzzx says

How much of my $130k earnest money will I potentially lose

$130k in earnest money? Earnest money is typically 1% of the asking price. He is buying a home worth $13 million?

Outside of commercial RE, NO ONE is putting down $130k outside of those that can afford to lose it. Unless it was a multiple bid property and the buyer wanted it I think $25k was the highest I saw for earnest money.

There are many other ways to not lose it either. Any contract, if you're financing, has a line for what your mortgage interest rate you need. Say rates are 5%, You put 3.5%. Seller, agent and attorneys will miss it 9 out of 10 times. Rate comes back at 3.6% and you can walk and get the earnest money back. You can get out. Inspection. Appraisal. It's extremely rare to lose a earnest/escrow deposit in residential.

It's like debt. Everyone is afraid of it. What if I lose my earnest money. I never saw it happen once in over 1k transactions. I did see a lot of renters lose their security deposit though. Nothing shady on our end. They trashed the place or got evicted.

zzyzzx says

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/142ifbp/massive_tax_increase/

I noticed our escrow payment nearly doubled from $750 to ~1500 and the bank says it’s because our taxes jumped from ~6,500 to 10,000. Am I just screwed or is there someone to contact for a clear answer on why they jumped?

I don't know if there's good stuff on Reddit, but that's pure bull shit. Flat out. $292/mo. They'd "maybe to $350/mo to get a loan from you. I didn't read the link, but the dip shit probably bought and didn't realize the taxes would get reassessed. Stop going to Starbucks or other frivolous shit if you can't afford it.

Bitcoiner says

zzyzzx says

Not worth addressing each troll post but I bite on this one: for CA, your property taxes can’t go up by 50%. Prop 13 limits increases yoy to 2% annually. Thank god for prop13!

Property taxes can go up in areas outside CA that high, but it's usually permitted construction work on your house. School referendums are the biggie for tax hikes generally which I believe can still happen outside of Prop 13 in CA, but I don't actually know. I've never read it, but I thought it was just limited to annual increases for non-school spending. If I'm wrong I'd never send my kid to a school in CA if I lived there.

zzyzzx says

How much of my $130k earnest money will I potentially lose if I decide to pull out of a home purchase deal in New Jersey?

North Carolina has a neat provision called a "due diligence" deposit in addition to the typical earnest money. It's quite literally the only leverage the seller has after signing the sales contract. Money deposited as "due diligence" remains with the seller regardless of the ultimate outcome of the process. Think of it as the cost to take the home off of the market for the closing period. When we sold our first home in 2014 the DD money was still typically under $1,000 and as a result you would have people kicking the tires and keeping you off market for 30 or 60 days. We learned this lesson the hard way. The last house we sold we said no earnest money but we won't accept an offer with less than 5% of the sales price in due diligence. That was in the 10's of thousands and gave us the leeway to agree to none of the requested concessions. It was as close to a 'zero bullshit' closing as I could hope for.

There's literally no way a buyer can get the DD money back, even if they discover that the house is about to fall down and even if there is evidence that the seller knew it (good luck proving it without a paper trail). The fact of the matter is that, in NC, using the standard realtor purchase contract, ALL homes are being sold 'as is'.

@Bitcoiner, I know you mentioned something about loving tenants breaking their lease because you can charge them for an empty unit. Was reviewing some Arizona renter law yesterday, and the state has the same clause California does, that you have to make reasonable effort to re-rent, even if tenant breaks lease.

I stopped being surprised about how many tenants and landlords don't know the law some years ago.

https://sfstandard.com/business/as-insurers-retreat-california-homeowners-may-need-the-fair-plan-so-what-is-it/

In the past week, Californians learned that two of the state’s largest insurance companies, State Farm and Allstate, have decided to stop signing new homeowner policies in the state.

Moreover, State Farm has sought significant rate hikes for its existing customers from California regulators.

Industry experts say both companies’ decisions are part of a broader trend in which insurers retreat from insuring California homeowners due to wildfire risks, climate change and construction costs that outpace inflation.

It's not "climate change" that caused those big fires but:

1. deliberate suppression of small normal fires
2. allowing massive amounts of underbrush to accumulate
3. arson by Pantyfa types

Dan Bongino(?) asked why there is no footage of these fires?

NuttBoxer says

Bitcoiner, I know you mentioned something about loving tenants breaking their lease because you can charge them for an empty unit. Was reviewing some Arizona renter law yesterday, and the state has the same clause California does, that you have to make reasonable effort to re-rent, even if tenant breaks lease.

I stopped being surprised about how many tenants and landlords don't know the law some years ago.

This is true. Lease break = Zero vacancy for the property owner.

1 month vacant in a year = about 8% vacancy. Say tenant breaks the lease and moves out in month 10. It takes a month to re-rent it. This means at least 23 months without vacancy.

This happens quite often for us as students finish college by the end of May or early June while their lease doesn’t end till end of June or July. We always credit the tenants if we re-rent the unit early. It takes us 1-3 weeks to re-rent a unit most of the time.

At $2M/year gross rent roll, that’s $160k @ 8% vacancy, which comes right off the top of the profit. Our vacancy has been 2-3% annually for the last decade.

Bitcoiner says

Not worth addressing each troll post but I bite on this one: for CA, your property taxes can’t go up by 50%. Prop 13 limits increases yoy to 2% annually. Thank god for prop13!

As California becomes a Nation of Renters, repeal or reform of Proposition 13 is inevitable.

Yes, yes, I know: the legislators are all property owners and landlords.

But their fear of the pitchforks is bigger than their greed.

B.A.C.A.H. says

As California becomes a Nation of Renters, repeal or reform of Proposition 13 is inevitable.

Especially as the state goes into a deficit as federal relief funds run out...
Prop 15 , the Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative (aka Split Roll) barely failed in 2020.
48.03% Yes
51.97% No
A "yes" vote supported this constitutional amendment to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value, rather than their purchase price.