patrick.net

GNL says

if the seller gives the buyer the VA loan then they cannot get another VA loan on their next purchase. Well, not unless the buyer is a veteran.

And that Veteran buyer is willing to substitute his eligibility.

WookieMan says

Veterans can have multiple loans. I don't know the details myself. My buddy owned two homes at one time with VA loans, veteran obviously. One he rented out, one he lived in.

I have acquired 2 houses that I used as rentals by assuming VA loans, but I never substituted my eligibility. I assumed those loans from individuals who bought despite knowing their time on station would only be two years. I just took over payments with no "equity" buy. Anyone can assume as many VA loans as their finances allow them to qualify for, you do not have to be a Veteran. However, to originate a VA loan, you must be an eligible veteran. The VA loan was designed to make houses easier to buy (no down payment) and easier to sell (assumable) when the veteran transfers. The VA loan is also meant for the Veteran's primary home, if a Veteran uses a VA loan origination to acquire rental property, he is committing fraud, even though whoever assumes the loan can do as he likes. Now as you said, the veteran can later move out of his primary residence acquired with his VA privileges, and then he can rent out his home.

B.A.C.A.H. says

WookieMan says

Just calling out that 80% of people in real estate, at least, are dead weight.

80? Are you sure? Sounds kind of low.

We could generalize, 80% of ALL people are deadweight, higher in real estate.

WookieMan says

I'll never us an attorney or Realtor ever again.

I like that sentiment, especially the Realtor part (around here there is little cost difference between using an attorney to close versus a title company). Not so easy in practice to ditch a realtor when selling though. Problem is, the vast majority of serious buyers call a realtor. The buyers are totally unfamiliar with the home buying process and want their hand held throughout the whole affair and thus think a realtor is the only way to buy. I have been able to buy homes without a realtor, but only once was I able to sell without one.

HeadSet says

Problem is, the vast majority of serious buyers call a realtor. The buyers are totally unfamiliar with the home buying process and want their hand held throughout the whole affair and thus think a realtor is the only way to buy. I have been able to buy homes without a realtor, but only once was I able to sell without one.

EXACTLY. It is about reducing your risk as a seller. Even if you get a 1/2 competent and 1/2 honest sellers agent, then you are a lot more protected then going out on your own from predator buyers, scam artists, etc.

I rather just pay the 5% for that protection.

.

HeadSet says

Not so easy in practice to ditch a realtor when selling though. Problem is, the vast majority of serious buyers call a realtor.

Flat fee to a realtor to list it and you do the showings.

zzyzzx says

Flat fee to a realtor to list it and you do the showings.

And bikini model rental room specialists.

gabbar says

WookieMan says

30 miles north is Mirror Lake in the Dells.

I have very fond memories of Devil's Lake in Wisconsin Dells. Hope you get to check it out.

I've been there a bunch. Camped there multiple times. Us FIB's (Fucking Illinois Bastards) make Wisconsin not a shit hole because of our tourism, travel and $$$. It is a beautiful state. I've camped and stayed in Wisconsin hotels probably 200-300 nights of my life. We're doing Thanksgiving at a water park up there again this year (indoor).

Unfortunately fertilizer run off has fucked this lake up, but I love Castle Rock lake. Plenty of bars on the water. Anchor the boat in a sand bar and have a party with randoms or friends. Super cheap if you camp at the state or county parks. It's an underrated state. Especially if you can handle winters, which there are fun activities. They have a top notch trail system summer for UTV's or winter for snowmobiling. Decent skiing. Obviously ice fishing. Hunting.

When we sell our house depending on timing, we might get a 3 month rental up there as we build over the summer. Unless we get a buyer willing to do a leaseback and we just stay in the house. Would be hard for me with work. Trying to convince the wife to get her boss to go in on a property together just over the border on a lake. Costs the company less for her travel up there, can rent it out as an investment and we could use it. Win win.

https://www.reddit.com/r/REBubble/comments/y7j284/8_months_ago_sellers_agent_called_my_offer_asking/

8 months ago, seller’s agent called my offer (asking price) “insultingly low”. This morning, same agent asked mine if I’m still interested.

And they’ve dropped their asking price by $15k since then.

I can put 30% down, maybe more, and I don’t have FOMO. I can easily afford the mortgage even at the higher rates. I’m looking for a place to call home for the next 20-25 years. Right now I’m renting month to month and I’m on great terms with my landlord as I’ve been here for years and he knows I’m looking to buy so I’m in no hurry.

This seller’s agent is about to see what “insultingly low” actually looks like.

Tell them you are considering amazing deals from 30 other sellers so you need to see who is in the top 5 and then get back to them.

Wait a few days... Heck even wait a few weeks. Tell them how you've been busy with so many sellers filling up your text messages and inbox. Take your time, then you tell them they are in the top 3 runner up, but in order to win you as their buyer, they need to do something more. Tell them that one of the top 3 sellers is giving an extra $25k off and paying for all closing costs.

You can even tell them how one of the sellers even wrote you letter saying how you'll be the perfect buyer to own their house. Tell them how they have to go above and beyond this to win you as their buyer otherwise you'll just buy from the other sellers.

Turn the table. Play the same game they used on us. An eye for an eye. No mercy.

https://markets.businessinsider.com/news/stocks/home-prices-housing-market-crash-fed-rate-hikes-jeremy-siegel-2022-10

Jeremy Siegel warns home prices are about to suffer their 2nd-worst crash since World War II amid Fed rate hikes

Inventory continues to stack up in Santa Cruz.

Ceffer says

Inventory continues to stack up in Santa Cruz.

Hipsters here may not remember or know about the Housing Crash in these parts in the early 90's.

Sales prices in certain pockets continued to rise even as they were falling elsewhere. I think the SF Bay Area continued to have appreciation when the LA Area went "flat".

First the homes were on the market for increasingly longer number of weeks. Weeks became months. Asking prices and sales prices fell. Fell a lot. It was deeper, and longer lasting, than what happened in the Bay Area during the fallout of the Financial Crisis. I think things started turning around in about 1994 - 1996.

Hipsters, deniers, Cool-Aid Drinkers and others will tell me how wrong I am to write this, and how it's "different this time", but what is happening now around here seems more like 1989-1991 than like 2007-2009.

https://t.me/epochtimes/69650

HeadSet says

The buyers are totally unfamiliar with the home buying process and want their hand held throughout the whole affair and thus think a realtor is the only way to buy. I have been able to buy homes without a realtor, but only once was I able to sell without one.

I'm no longer an agent/broker though. So legally I'm free from the licensing side and not losing my profession. I'm not a shit person and would never screw over anyone. I could easily handle making a buyer comfortable.

Also remember I'm in a small town. I work for the school district. I pretty much know anyone that would buy my house. Their kids. Their parents. Hell their grandparents. The buyer just needs an attorney in all reality. If they want an inspection, go for it. My house was built in '63. I did all the rehab work beside plumbing and HVAC. Is it perfect, no. But for the price point it would blow most people away. We have interested people just based on the gossip that we're building and moving.

Hell if something was messed up I'd come back and fix it after sale. We're in a very unique situation where a realtor makes zero sense for 5-6%. Even the low fee one's. You're still giving away 3.5% usually. I'm going to do all the marketing either way as I know I can do it better. You pay for MLS access. That's it. Now if you don't know how to take photos, market a property, handle a transaction with all the parties, I get using a realtor. I was one and don't need one. I'll save $15-20k on commission tax free gains.

I'm not at the price point where MLS access is worth it. I can get my house on all the same sites. Just takes a little work. Maybe 3-4 hours. I've managed 50-70 listings at once as well. So just one is a cake walk with showings and managing that. I can take better photos, have a drone (we have a pool, so important), can take day and night shots as our backyard is pretty kick ass at night.

I got out because I couldn't deal with the people and frankly the phone calls. Voicemail: "Hey it's Bill Dickwad with Coldwell Banker interested in X property, call me back at xxx-xxx-xxxx." WHAT THE FUCK DO YOU WANT!!!! Ask the question in the voicemail for fucks sake. Then we don't have to talk about it and can just answer the question on the return call that you won't answer just like I didn't.

I assumed that the housing market would model 1978-84. Inflation pressures, recession, and coming off a really large increase in housing prices that wants to be “sticky.” From 1974-1980 the price of houses went up quite a lot, maybe 100% or more.
Then Reagan was elected and interest rates went to the moon. This stopped house pricing gains and they went slowly back down. Slowly! And they also didn’t start appreciating much at all the rest of that decade.
I think maybe the house prices over compensated for inflation and then fell back down slightly to a more “normal” place as inflation came under control. By the time the 90s came around, nobody was interested in housing because it had been a decade-long loser, a commodity that everyone came to see as “fixed.”

If that timeline pays out again, we should have softening prices and few sales. The major difference between then and now is that private equity owns so very much residential real estate. It won’t allow prices to drop TOO much. Maybe 20% drop and then they’ll snap up any properties that go lower. This will put a “floor” under prices, artificially. When the recession ends, and inflation is over, there may be another increase. It’s going to be a while tho. Housing is a loser for years.

Shaman says

The major difference between then and now is that private equity owns so very much residential real estate. It won’t al...

The other BIG factor is remote work. Before remote work, people often had to move if they switched jobs. Now, people stay put and never sell assuming they can afford the payment.

Shaman says

I assumed that the housing market would model 1978-84. Inflation pressures, recession, and coming off a really large increase in housing prices that wants to be “sticky.” From 1974-1980 the price of houses went up quite a lot, maybe 100% or more.

I remember that time.

I was in high school in 1977 when my best friend's family moved from SJ to the Peninsula. Around the time the family moved in April-ish of that year, there was a huge front page headline in the SJ Mercury: SJ home prices had gone up a huge amount (I think it was 30%) year-to-date. This is what got me interested in all this stuff when I was only a freshman in high school. So, I began looking at the homes for sale ads in the classified section of the newspaper.

(Something else that happened during that time was passage of Proposition 13, because tax bills that came with the market assessments were forcing folks to sell).

Obviously, those years were before the internet and craig's list and all that stuff. The classified ads, which were paid for by character or line, showed as few characters as possible. Lots of shorthand. WD, AEK, 3/3 (BR/BA), 1400 (sq ft), and of course contact info for the ®ealtor.

The interval shaman mentioned, is last time the fed began a rate hike campaign to fight inflation, and was BEFORE the S&L crisis.

Market rates for mortgages got horribly high. But it was OK, because (before the S&L crisis) all the mortgages were assumable. Along with the numbers about sq ft, etc, were the terms of the assumable mortgage, written in shorthand with the balance (or payment), rate and remaining term. Buyers would assume the mortgage and pay cash either out of pocket or with a small loan, for the difference between the mortgage balance and the purchase price. The terms of the assumable mortgages were every bit as important as the "location-location-location" and physical characteristics of the house.

The assumability of the mortgages propped up the house prices during that period. Enactment of Proposition 13 in 1978 further propped up the prices by preventing more of the tax-stress sales.

After the collapse of S&L, most new mortgages are no longer assumable with the original terms.

In this sense, Hipsters and ®eatlors are right: It Is different this time.

Thw 10-year UST is heading past 4%.

zzyzzx says

HeadSet says

Not so easy in practice to ditch a realtor when selling though. Problem is, the vast majority of serious buyers call a realtor.

Flat fee to a realtor to list it and you do the showings.

A "flat fee" without a commission to the buyer's agent means no agents will bring anyone to you house to show. You would at best get someone to come by that happened to talk to your listing agent. Fat chance. Notice that the typical "flat fee" listing is something like $2500 to get listed, then 3% to the selling agent. Even then many realtors avoid showing flat fee listings, which I do not understand since they get the same 3% as with a multilisted house.

WookieMan says

I pretty much know anyone that would buy my house.

That is a good position. Cardinal Rule here - if you already have a buyer, you do not need a realtor. If you do not have a buyer, you need a realtor to find one since the overwhelming amount of serious buyers call a realtor.

Again, the only purpose of a realtor is to find a buyer. The need for a seller to have a realtor has nothing to do with inspections, closing details, or handling a transaction.

WookieMan says

You pay for MLS access. That's it.

MLS access is a big deal, and the only true advantage the realtor has. Although it may work for you, the average Joe will not be able to market to serious buyers no matter how well he can take photos, drone shots, write copy, and get his polished flyer posted up on the Piggly Wiggly bulletin board or on the celebrity wall of Big Fat Herb's Diesel Cafe and Firing Range. Newspaper ads and FSBO web sites do not help either. Joe may be the best marketer in all of southwestern Brown County, but that does not matter if all the buyers start by reflexively calling a realtor.

The Fed is trying to bring us back to the 1990s as far as interest rates. Everything has been turned upside down as far as economics such as price discovery and valuation since the first days of zero interest rate policy (ZIRP) and quantitative easing (QE) in 2009. They should have made these rate increases in 2014 after 5 year of this.

I suspect once the Fed Funds rate steadies around 4.5% by next spring then the 30 year mortgage rate will settle between 5.5% and 6.5%. Expect at least a 20% drop in home prices from it peak levels when the 30 year rate was around 3%.

HeadSet says

The need for a seller to have a realtor has nothing to do with inspections, closing details, or handling a transaction.

I disagree. If the seller is working a full time job, has kids, activities, they literally are whimpering idiots. The sellers or their attorneys almost never communicate. You have to pull teeth from lenders to get shit done and 99% of sellers don't understand what is even going on. The seller schedules nothing.

Some of the dumbest sellers I had to deal with are professionals. Doctors are the worst. Hell even lawyers that don't practice in the real estate real are simple idiots. I probably met 10k people over my time in real estate in person, phone or email. Maybe more. Very rarely would I consider many of the people I dealt with smart with regards to RE.

I'll restate that brokers are douche bags. Attorneys are the worst, then other brokers if working the listing side, then HOA's, then inspectors, then lenders. Lenders are usually god awful humans, but everything is automated in todays world and the buyer typically is doing all the heavy lifting to get the loan. Not a purchase, but my last refi I never talked on the phone and didn't email or get an email from my mortgage guy. Just dealt with the title company who closed the loan.

We've over complicated the process with too many hands in the cookie jar. You almost never need an attorney if you can read and use standardized contracts. It's like homework for attorneys. The check the filled in blanks. Then charge $600-1,200 to check you and your brokers work. Rinse and repeat.

Mortgage rates inch closer to 7%, remain at 20-year high.

Mortgage rates inched closer to 7% this week, remaining at their highest point since April 2002 and driving more buyers and sellers from the market.

The average rate on the 30-year fixed mortgage edged up to 6.94% from 6.92% last week, according to Freddie Mac. Rates have increased more than a full point since the start of September and are now more than double where they were at the beginning of the year.

The rapid ascent, driven by the Federal Reserve’s actions to rein in runaway inflation, has smothered buyer demand, while homeowners hunker down, unwilling to give up their current ultra-low rate.

https://finance.yahoo.com/news/mortgage-rates-high-140023047.html

https://www.dailymail.co.uk/news/article-11334965/US-sees-RECORD-drop-house-sales-purchases-plummet-23-amid-skyrocketing-mortgage-rates.html

US sees RECORD drop in house sales as purchases plummet 23% and listings plunge 22% amid skyrocketing mortgage rates and crippling inflation

https://www.reddit.com/r/RealEstate/comments/y8khcj/question_regarding_arm_rates/

I bought a condo 4 years back with 5 yrs arm option to get good rates. Now, given ARM will expire in Dec 2023 for me and rates are through roof currently. Anything I could do in meanwhile? Secondly, is there a cap to how much APR will be Hiked by mortgage company ? Current rate for my 5 yr arm is 2.25%

HeadSet says

A "flat fee" without a commission to the buyer's agent means no agents will bring anyone to you house to show.

Flat Fee to list. Same commission to buyer's agent. Yes, they brought people to show.

HeadSet says

Notice that the typical "flat fee" listing is something like $2500 to get listed, then 3% to the selling agent.

$450 to list and 3% to buyers agent.

zzyzzx says

https://www.reddit.com/r/REBubble/comments/y7j284/8_months_ago_sellers_agent_called_my_offer_asking/

8 months ago, seller’s agent called my offer (asking price) “insultingly low”. This morning, same agent asked mine if I’m still interested.

And they’ve dropped their asking price by $15k since then.

I can put 30% down, maybe more, and I don’t have FOMO. I can easily afford the mortgage even at the higher rates. I’m looking for a place to call home for the next 20-25 years. Right now I’m renting month to month and I’m on great terms with my landlord as I’ve been here for years and he knows I’m looking to buy so I’m in no hurry.

This seller’s agent is about to see what “insultingly low” actually looks like.

Tell them you are considering amazing deals from 30 other sellers so you ...

Got an update on this one:
https://www.reddit.com/r/REBubble/comments/y8i0g3/update_8_months_ago_sellers_agent_called_my_offer/

My offer was something along the lines of this post where it was adjusted to account for the current rates:
I was offering $400k at 3% rates because my mortgage would be $250k and my payment would be $1100.
Now I can only offer $325k because my payment on a $175k loan at 7% is $1150.

Anyway, the seller's agent was livid and flipped out on my agent. She called my agent unprofessional and told her my offer was "more insulting than the original one".

Well my agent also found out through the grapevine the seller and his agent are 1) dating and 2) the seller is in the midst of a very messy divorce, his wife having left him since he cheated on her. With his agent, whom also represented him when he bought his Airbnb properties. Oh and he also recently lost his remote job in tech at the beginning of this year as well.

My agent laughed and took it in stride and she's pretty chill. We're walking away from this completely, but this guy is in quite the sticky situation.

Funny thing is after I told my landlord the deal isn't going to happen, he asked if I'd be interested in making an offer in the house I'm currently renting from him. He and his wife are retired, pretty wealthy, and super chill people and they don't need the money (hence why he's never raised my rent in years). I actually do really like the house I'm renting from him and he told me to sleep on it since he wasn't going to sell until next year (they want to move out of state), but if I was interested we could make something work out.

https://finance.yahoo.com/news/housing-existing-home-sales-drop-140004730.html

Existing home sales drop for 8th straight month in September

cisTits says

Housing
Experts
Of
PatNet

I would say at least 51% of housing market is driven by affordability such as housing cost is no more than 35% of monthly income.

The Fed is trying to take us back to the late 1990s as far as paradigm with respect to interest rates. That is why I see condition settling where the 30 year mortgage
rate fluctuates between 5.5% and 6.5% in 2023.

.

https://www.reddit.com/r/RealEstate/comments/y91khr/cleared_to_close_on_a_house_that_we_can_longer/

Cleared to close on a house that we can longer realistically make work

Oddly enough, it's not about the price, but the comments make it relevant.

zzyzzx says

Cleared to close on a house that we can longer realistically make work

Yet another reason why Hit-Men-R-Us is the #1 franchsie in the world.

https://www.reddit.com/r/RealEstate/comments/y96879/should_i_just_lose_my_earnest_money/

Should I just lose my earnest money?

So I put down 12k deposit for a new build house I signed the papers like 10 days ago. Now I’m seeing literally the exact same house being listed for 50k less. Do I try to negotiate or just tell them I’m Walking. At this point I think I would be better off losing 12k then overpaying by that much more for the same house.

Everybody get familiar with this term:
https://en.wikipedia.org/wiki/Strategic_default

Strategic default

A strategic default is the decision by a borrower to stop making payments (i.e., to default) on a debt, despite having the financial ability to make the payments.

This is particularly associated with residential and commercial mortgages, in which case it usually occurs after a substantial drop in the house's price such that the debt owed is (considerably) greater than the value of the property — the property has negative equity or is underwater — and is expected to remain so for the foreseeable future, such as following the bursting of a real estate bubble. Such borrowers are called walkaways. The process of strategically defaulting on a home mortgage has been colloquially called "jingle mail" — metaphorically, one mails the keys to the bank.

zzyzzx says

Strategic default

I remember reading about this in the last housing crisis. Folks seeing the same house across the street as theirs selling for substantially less that their underwater-bought-at-the-peak-mortgage would buy the cheaper home and walk away from the albatross around thier neck.

There was definitely a double standard about this strategy, where developers like Tishman Speyer were lauded for the smart business move, but small time homeowners vilified, at the time.

"Tishman Speyer Properties, a big and you would think sophisticated real estate outfit, is doing the stroll on a $4.4 billion mortgage. The company is turning over the keys to more than 11,000 apartments in New York City’s sprawling Peter Cooper Village and Stuyvesant Town apartment complex in lower Manhattan, which it bought in 2006 through a partnership that includes investment firm Blackrock."

https://business.time.com/2010/01/25/tishman-speyer-the-grand-walkaway/

zzyzzx says

A strategic default is the decision by a borrower to stop making payments (i.e., to default) on a debt, despite having the financial ability to make the payments.

You short sell it. Mailing in the keys is the dumbest thing you can do. It's generally only a 3-4 year ding for a short sale versus 7 with a foreclosure. Basically without private financing or a personal relationship with a small bank, you ain't buying any property for 7 years. Obviously if you have cash you can buy, but banks can throw a lien on any other property you own. Might be in 3rd position, but it prevents you from selling it in the future.

No one reads loan paperwork. And I'm sure terms have shifted toward the lender side to have the ability to lien other properties an owner has. With a short sale you get a release from all obligations of that loan. A foreclosure just means you didn't pay and don't have to pay but they can come after other assets if they want. Never suggest anyone strategic default via foreclosure and mailing in the keys. You only have one life and close to a decade of it is now fucked up.

Short sales was our bread and butter 2007-2012. Were a total pain in the ass, but the owner could get back into owning much quicker. Never just walk away.