patrick.net

wait; this is the same nonsense we saw a few years ago, but lots of people haven't learned a thing yet.

Remember home selling/buying is a business decision. They will do everything to sqeeze the last drop when they think that's possible.

What they thinking is that, the worst is over, interest rate is low, stock is going up (to the point where Lehman collapsed), economy is picking up, things getting better, obama credit is still there, enough people bidding on a crapbox for whatever reason, and this home is descent. So, why not?

We'll see how long it can last.

When you have no urgent reason to buy home right now...

Option c. Keep renting and saving downpayment for a while. At the same time, keep your eyes on market trend, get pre-approved, study home buying process, get yourself ready.

For myself... I am reading a book about how to grow tomatoes. :)

No, it is not a buyers market (unless they 'buyer' sincerely desires to lose money in a hurry).

If they want to waive appraisal contingency, RUN, don't walk, away perhaps after telling them they "shouldn't play poker, if they don't know how to bluff".

Content yourself with knowing you'll probably be able to 'compete' for the property in a few months on the steps of the courthouse and pocket the difference.

divby0: the house is REO, that means it is already foreclosed...kind of late to wait for the courthouse steps!

> Bank asked top 5 to remove appraisal contingencies.

I would have torn up my offer as soon as they tried this stupid stunt.

How badly do you want this pos? If there are appraisal contingencies the bank wants removed, I'd run.

I wanted the house, but not at the expense of me paying for something that is not worth the money before I even begin paying mortgage on it.

OK. Having lost out on a few REO's to bidding wars, here are my thoughts.

1) You can't compete with idiots. My personal belief (with no data to back it up, so take it for what it is worth) is that all of the green first time home buyers are out there buying before the first time buyer credit runs out. Banks are starting to lend again, and if your credit is good, they will lend you far more than they should (relative to historical long term norms).

2) All markets are local and, like it or not, some are probably 'Hitting bottom" that said, I have no clue about anything on the west coast.

3) Banks hold all the cards. Bottom line. Plus, they know all about #1, as they are also the lenders to may a mortgage. If this were a poker game, the would be the house. They have an implicit advantage.

4) In your other post, you mention you are single. You end your post with I got out of the deal, and thinking that I am better taking one of the two approaches

a. Buy something inexpensive, at a simpler location for 300K, fix up and either live there myself or allow renters in.

b. Save and purchase a shorter term loan, saving the $$ on ‘renting’ money from the bank.

Using the simple 3.0x income rule, I hope you earn well over six figures, or have at least that much in the bank. Otherwise, there is a good chance you are going to overextend yourself.

That is part of how we got into this mess. People making $60k thought they could actually "afford" a house for $300k. On paper they can, and if they have good credit, a bank will let them, but those that go down that road are one step from financial ruin, and walk a very fine line. It's hard to pay for an unexpected expense when your mortgage is over 50% of your take home pay.

I do earn 6 figures, and I do savings. I don't want to overextend and that is why I stood back and re-assessing.

Good question though, how to not let bank hold all the cards? Is there a way? Am I missing something?

If you're here reading up on buying a house, you're probably way ahead of the curve as it is.

That means you're competing with a lot of idiots out there who don't know where they stand. If you're bidding against them, just drop the house. I read somewhere a great quote for ebay "If you're winning all your auctions on ebay, you're paying too much". Walk away from the homes with far too much interest. Keep looking, and try and find something where few have bid on it. Of course this means not getting too emotionally attached to any house before place an offer on it.

I have a friend of mine who is trying to go to the bank directly, to cut out the listing real estate agent. I don't think it will work, but I will keep you posted.

I also heard anecdotally about a case where the person sued both the listing agent and the bank. I almost had to go that route myself on a particular property, but at the end of the day, it wasn't worth the large amount of money, time and effort that it would have taken. Plus, my chances of wining the case were less than 50%. Big banks have good lawyers, and lots of them.

I can't wait until the sellers start asking for "love letters" from potential buyers as they did in the boom