patrick.net

Well we decided to put in an offer that matches the comp a few doors down. It is 65K less than asking.

The seller bought this house 20 years ago and still owes 300K. Took money out for family business and now the business went belly up and they filed for bankruptcy.

I was the first person to see the house (no open house yet) and neither my agent nor the listing agent were able to be there. The seller all but told me her life story.

Anyone who is selling right now is in distress. Last week we saw a house with an illegal in-law downstairs (very common in SF) and when the seller (who is 5 months late in his mortgage and trying to do a short sale) knocked on the door to show us the downstairs, I kid you not, WE had to explain to the lady living there what was going on. She had no idea. She's been dutifully paying her 1K month rent for a dark shoebox.

Another FSBO we looked at: ex-realtor selling his own house because of divorce. He was practically crying as he showed us the house and told us the story of his wife leaving him.

Into the depths of real estate hell.

It could be worse: we could be looking for a rental right now. The rental market in this city is so tight and crazy pricey. We'd have to lose the kids and the dogs if we had to find a new rental.

APOCALYPSEFUCK isFrank Sinatra says

This was obviously a noobee Realtor®.

Haha. I get it.

E-man says

I thought you were going to sit out this Summer...........What changed?

We are getting some down payment assistance from the city. They have already cut the amount by 10K since we started looking. Keeping our DTI low is dependent on the DPA. With the state and city budgets the way they are, we'd be foolish to wait so long that the offer of 70K interest-free deferred payment for 40 years runs dry (no shit, free money)

E-man says

I suggest you offer to buy it as a FSBO. Cut out both agents would save the seller about $35k in commission,

Good suggestion, but too late: our agent has already been the one who arranged the showing with the seller's agent.

E-man says

Cut out your bitterness with the whole housing situation when you talk to the seller because she doesn't give a damn

Done. We showed up to see the place with a large bag of lemons for the seller and like I said, she all but told us her entire life story and how much she had in her bank account.

I am not feeling bitter these days, actually. If we can find a house in our range, then our monthly PITI will be lower than our rent.

The IF is dependent on the bubble NOT BEING INFLATED again. Prices in the low end (under 500K) are very do-able right now.

When I get the urge to look at real estate I read this blog

Listing agent say there is maybe another offer. If they ask for a higher bid, I'll give them another offer of 5K less.

1sfrenter says

E-man says

I thought you were going to sit out this Summer...........What changed?

We are getting some down payment assistance from the city. They have already cut the amount by 10K since we started looking. Keeping our DTI low is dependent on the DPA. With the state and city budgets the way they are, we'd be foolish to wait so long that the offer of 70K interest-free deferred payment for 40 years runs dry (no shit, free money)

This is fucking ridiculous. Since when should the government be providing assistance for people to be buying $600K+ homes?

dodgerfanjohn says

Since when should the government be providing assistance for people to be buying $600K+ homes?

Who said anything about a 600K house??

We are looking at sub 420K houses. That's the bottom of the barrel in SF.

dodgerfanjohn says

This is fucking ridiculous. Since when should the government be providing assistance for people to be buying $600K+ homes?

That's the reality. Our govt. culture is to tax people and spend it - raise,pensions,programs etc. etc.

The only trick I know of is to go in without an agent and ask the selling agent to represent you as well - they they get a double commission. I haven't tried it, but I bet it works. I've heard that it does.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/22/MNP71OL7VM.DTL&ao=2

I know that there are many who are advocates of the "free market" making all the decisions, but a little foresight and public planning is needed in order to make communities livable, viable, and vital.

The free market only-for-profit planning has given us miles upon miles of badly built McMansions in places that resemble a gulag more than a true community: no sidewalks, libraries, stores, parks, public space, etc. These exurbs are fast becoming the new ghettos.

I'm not talking public planning a la former Soviet Union, but let's face it, if everything is left to the "free market" (which we know isn't at all free), then things get built with only a eye for one thing: profit, and usually short-term profit at that.

1sfrenter says

TMAC54 says

Strategy like yours caused the global economic financial crisis.

That's the most ridiculous thing I've ever heard. We need a place to live and keep getting outbid by all-cash and investors. Been looking for 6 months and getting tired of it.

Yes, and that's precisely why you should move out of there.

1sfrenter says

That's the most ridiculous thing I've ever heard. We need a place to live and keep getting outbid by all-cash and investors. Been looking for 6 months and getting tired of it.

And THAT is part of what they hope for/count on. Yes, I too looked and looked and looked, took over a year. I too got outbid four times; and my wife was ready to kill me (more than once). In the end we ended up with more than what we had hoped for, for a price lower than we anticipated. I feel for you, but if you buy this overpriced house now (in this time of discontent) you will end up kicking yourself down the road. Just stick to your guns and only buy that which is worth the price.

1sfrenter says

We are looking at sub 420K houses. That's the bottom of the barrel in SF.

You're probably not going to like this suggestion, but ever thought of moving to a part of the country where housing IS affordable and reasonable? Those prices combined with the taxes in CA make CA very unappealing to me.

1sfrenter says

We showed up to see the place with a large bag of lemons for the seller

When life gives you lemons, sell your distressed property at an inflated price! :)

I agree with the recent posters here. You'll probably regret it, at least a little.

Unless you believe that the ptb can engineer a false floor and defy gravity, the prices will be lower eventually here.

You've waited 10 years, don't give up now!

(disclaimer: don't blame us if the wizards of Wall Street succeed, but given that JPM just lost 3 billion on a hedge, how smart can these bastards really be?)

mmmarvel says

You're probably not going to like this suggestion, but ever thought of moving to a part of the country where housing IS affordable and reasonable?

Yes, we have. But with secure jobs with seniority, kids in school, friends and family and a life here, well, this is our home.

Everything does not boil down to money for us. I know we would be able to have a bigger house and more disposable income if we moved somewhere cheaper, but this is my home and I love it here among the freaks and nuts and queers.

I have traveled the world and been to a great many places, lived in several different cities, lived in the country and in the burbs, and sometimes you just land in the place that feels right.

Friends, family, health, and a small place to call home=riches.

I don't really care about having a bunch of stuff or even a huge house. I'll drive my old paid-off car or ride my bicycle and marvel at the fog coming in over twin peaks, go surfing, swim in the frigid bay waters, sleep under my down comforter all year with my windows open every night and hear the foghorns in the distance and laugh at the tourists in their shorts and t-shirts in July.

Money is only the smallest part of happiness.

CL says

I agree with the recent posters here. You'll probably regret it, at least a little.

At $1900 month PITI for a SFH in San Francisco, the value of any house we buy would have to fall more than 75K for me to have serious regrets.

And then only if the rental market totally tanks too. SFH is the city rent for 2K-4K per month.

We gotta live somewhere. This is not about investing, it's about shelter. Our minds have become so warped over the last decade that when we think housing all we see is dollar signs.

You may see those dollar signs again if it does drop. Nobody cares about the price in the abstract, but if your neighbors have the same house sold for half the price or rents drop accordingly, will you feel the same?

I don't care either way; you have to ask yourself if that's truly how you feel.

Or you'll rationalize it's a good price later, which is what "they" really want from you.

Blessing in disguise or just another bump in the road:

2 other offers besides ours on the overpriced house. All 3 offers were within 5K of each other, and all 3 offers were 60-65K LESS than asking.

Seller rejected all 3 offers. Apparently even her listing agent is irritated, because he knows that the house won't sell for anything close to what she wants. The only way that house will sell for list is if someone comes in with all cash, cuz no way it will appraise.

Maybe if it's still listed in 2 months we'll give it another go.

If you believe the hype, there should be a bidding war going on!

Good luck! Here's to hoping it's a blessing!

(Let us know what happens to the property, and to your status!)

The bidding wars on the low end (300-500K) here in the city are only for homes that can be fixed and flipped or homes that may have rental income if they can be divvied up into many small rooms for multiple Chinese families.

A small house that won't sell for more even if it's fixed up won't get overbid.

In the over 600K range, it's folks who want to live in the house.

E-man says

Here is my suggestion. Say the property is worth $600k, and the owner is wishing for $665k. I suggest you offer to buy it as a FSBO. Cut out both agents would save the seller about $35k in commission, which brings the bottom line number to $630k. Meet her 1/2 way from the comps and offer $615k. That's about 2.5% higher than the comps.

That's probably not practical now that an agent has been retained.

When I sold a home using an agent (part of the relocation package deal - the company would pay for all selling costs and gross-up to cover the tax bill on the reimbursement, but only if I used their preferred agency) her boilerplate contract said she got paid if the house sold before it expired after xx - xxx days (if not renewed).

Selling that property as a FSBO after engaging the agent without paying her would have required taking it off the market, eating x months of mortgages + taxes, and closing the deal x months later.

This is fucking ridiculous. Since when should the government be providing assistance for people to be buying $600K+ homes?

Since they zoned the land to artificially prop up prices.

Make your offer a STRONG offer, but not through the offer price.
I use only two contingencies: 17 day rescission period and loan appraisal/funding.
I would pencil in "AS-IS" and not mention anything about pest reports, house inspection reports or roof inspections.
These reports if in the offer may be reviewed by the loan officer/underwriting and kill the deal (even for one broken window). Instead of the contingencies...just use these two above.

In reality have your best inspectors lined up--PAID BY YOU---and reports ONLY TO YOU. Have them start inspections immediately during the rescission period. The seller will keep their mouths shut UNLESS THEY KNOW OF SERIOUS hidden defects that could kill the deal....such as HUD section 1 or section 2 pest reports.

YOU have the decision to make---HOLD OR FOLD ---- BUY OR RESCIND your offer---you have that 10-17 day period. Once its over--- your earnest deposit is at risk of you walk instead of continue with the purchase.

YOU CAN GET a HUGE price discount with a motivated seller or bank. It just takes brass huevos at this time!

But you can save tens of thousands of dollars...based on REQUIREMENTS OF THE SELLER.

The most important variable in real estate OCCURS IN BUYING, NOT SELLING!

NEVER have an emotional attachment to a house.

Make your highest offer if you want the house. If it's not accepted
WALK AWAY. Your not there to make the seller money.

Seller on this house has lowered their price, but only by 15K. We have put in 2 offers, both rejected. So now we just wait, cuz the house isn't going to sell at the list price.

Found another house we really like, also crazily overpriced. Seller hasn't paid his mortgage in 6 months and the list price is over 100K too high, per comps.

He already took (sold) all the appliances and apparently is going to foreclose if he doesn't get his fantasy asking price. Won't consider a lower price or a short sale (says the listing agent), he would just rather jingle mail. House has been vacant for at least 6 months.

I am trying to find out how much he owes, so I can at least make an offer for that amount.

I researched the seller - the guy is on the planning committee for the city government in another town/city. The whole thing is so irritatingly skeevy. I dunno, maybe he owes the same amount as his ridiculous asking price.

None of this would even be worth my time if inventory wasn't so crazy low and if we weren't competing with the all cash investors and flippers.

1sfrenter says

None of this would even be worth my time if inventory wasn't so crazy low and if we weren't competing with the all cash investors and flippers.

Can you wait at least 3 more months? We are in this same situation like yours, except that 'down payment' assistance which ineterst me very much. Somone told us to stay put until after the summer where something in the banking law would change. Then they start throwing away all squatters and cleaning their inventory.