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Depends on your valuation of $850K compared to historical trend...
Sounds a bit spicy to me... 200-300K homes dont magicaly become 3x more in 10 years.
Property History for 218 North IRENA Ave
Date Event Price Appreciation Source
Dec 27, 2010 Price Changed $860,000 -- MRMLS #S10061527
Dec 27, 2010 Relisted (Active) -- -- MRMLS #S10061527
Nov 01, 2010 Delisted (Hold) -- -- MRMLS #S10061527
Aug 11, 2010 Price Changed $859,900 -- MRMLS #S10061527
Jul 26, 2010 Price Changed $899,900 -- MRMLS #S10061527
Jul 16, 2010 Price Changed $915,000 -- MRMLS #S10061527
Jun 26, 2010 Price Changed $998,000 -- MRMLS #S10061527
Jun 16, 2010 Price Changed $975,000 -- MRMLS #S10061527
Jun 08, 2010 Listed (Active) $998,500 -- MRMLS #S10061527
Aug 28, 1996 Sold (Public Records) $265,000 -6.3%/yr Public Records
Feb 21, 1996 Sold (Public Records) .. $242,250 -- Public Records
Mar 16, 1989 Sold (Public Records) $430,000 -- Public Records
Mar 16, 1989 Sold (Public Records) .. $287,000
Property History for 210 South PROSPECT Ave #2
Date Event Price Appreciation Source
Nov 30, 2010 Listed (Active) $849,000 -- MRMLS #V10124193
Nov 17, 2004 Sold (Public Records) $674,000 12.1%/yr Public Records
Apr 10, 1998 Sold (Public Records) $317,000 8.7%/yr Public Records
Jul 11, 1996 Sold (Public Records) $274,000 -3.8%/yr Public Records
Dec 18, 1992 Sold (Public Records) $315,000 -- Public Records
This one is good ... $300K to 800K in 10 years.. LOL! I dont think so!
Property History for 2010 SPEYER Ln Unit A
Date Event Price Appreciation Source
Jul 08, 2010 Listed (Active) $799,000 -- CARETS #P742847
Aug 03, 2000 Sold (Public Records) $475,000 -100.0%/yr Public Records
Aug 03, 2000 Sold (Public Records) .. $465,000 33.6%/yr Public Records
Jan 15, 1999 Sold (Public Records) $297,000 -- Public Records
B.A.C.A.H.
2010 Dec 30, 1:13pm
If she wants to "get rid of the place", well we get rid of garbage, or estranged spouses, or weeds in the yard. We don't even get rid of problems, we solve them.
We get rid of nuisances. We don't "get rid of" an asset. If it was correctly priced, it would've sold already to someone else when your financing fell through.
You need an "agent", but I would suggest a lawyer for a fee.
Place sold in mid 2002 for $625,000, so $850,000 is a 3.7% increase over 8.5 years. That is in line with Case-Shiller, right? Average $/sq foot for places sold in the zip code is at least $400, if not $450.
Thoughts on owner financed?
Agent had a backup offer that was pretty low, and we were so far down the path, that she rejected them.
Good advice on a lawyer. I wouldnt go into this without counsel and thoroughly understanding everything.
Place sold in mid 2002 for $625,000, so $850,000 is a 3.7% increase over 8.5 years. That is in line with Case-Shiller, right? Average $/sq foot for places sold in the zip code is at least $400, if not $450.
You're assuming it was fairly priced in 2002. The CA bubble got going in 1997.
You say it's priced "well below market value". It that were true, it would no longer be on the market.
Nothing wrong with seller financing, but if it's to make the transaction go faster, that is a big red flag.
B.A.C.A.H.
2010 Dec 31, 7:41am
I could lose out on the place
The wording speaks volumes, more than anything else on this thread. Like I heard during bubble years so many times, "we lost the house", now I have been hearing again, with completely different meaning though, "We lost the house".
elliemae
2010 Dec 31, 9:35am
If she really wanted to get rid of the place and you really wanted to buy, she would finance the entire loan. But she smells a sucker and figures you'll want the place so badly that you'll overlook the total idiocy of financing with a 3 year balloon when you don't qualify for a loan now.
Things are tight (qualifying for loans), and are just gonna get tighter - what are you gonna do in 3 years when you have a huge balloon payment due, you're upside down (could easily happen) and she gets her place back, less the down payment and the interest/principle you've already paid?
B.A.C.A.H.
2010 Dec 31, 9:37am
Things are tight (qualifying for loans), and are just gonna get tighter
Who's problem is that? - the buyer's or the seller's?
I think it is the seller's problem.
elliemae
2010 Dec 31, 9:38am
Not if he buys now & doesn't qualify for a loan in 3 years. He loses.
B.A.C.A.H.
2010 Dec 31, 9:44am
Not if he buys now & doesn’t qualify for a loan in 3 years. He loses.
Interesting.
I assumed that Waitingtobuy is a she, because the expression "we lost the house" during bidding frenzies was usually said to me by a woman.
Not a statistically significant sampling though, could just be a coincidence.
No, sybrib, Im a man. Project much? I've been at this since August and no, I havent panicked once during the process and have been extraordinarily patient. The reality is the place is a very good buy, priced 20% less than anything around it. There just arent a lot of places priced at $850K selling due to stricter underwriting.
As for being a sucker, elliemae, you will notice my hesitation specifically because of the balloon payment. I doubled my money on the last place I sold and have been keeping my powder dry for the right buying opportunity. I wasnt born yesterday.
I will probably wait until I file my taxes for 2010 to qualify for a traditional loan.
B.A.C.A.H.
2011 Jan 1, 5:38am
Anything that has been for sale since August is not priced to sell.
I have posted here before. I found a very good deal in Redondo Beach, almost 3200 sq feet with an ocean view, at $850,000. This works out to $267/sq foot, well below market value here. Place is where we want, only a few blocks from where we are now, and the home was nearly totally renovated.We have agreed on everything; just waiting on a loan.
Started the process at the beginning of August and was turned down by my first lender 1 week before closing, which was ridiculous. I was turned down because the business that I own had a loss in 2009 (I took a large pension expense). Otherwise, the business is solid. I have plenty of assets, enough to pay for the home for at least 5 years if my business went under, which it isn't. I recently thought I had an approval from another lender, whose first underwriter said yes and the second underwriter, a week before closing again, said no. (I sadly expected this based on my last time around).
The second broker said because 2010 was a good year for my business, I will easily qualify for the loan since the reversal in my AGI is more than $80,000, keeping my DTI ratio in line.
The seller really wants to get rid of the place since it is not occupied and it is burning a hole in her wallet. She is taking a substantial loss ($350K). She wants to do owner financing for either the part of the loan I don't qualify with the bank for right now, or the entire amount. There is a balloon payment due in three years (I don't like this); her thinking is I should have no problem qualifying for a loan in the next six months to pay off her loan anyway. It is an interest only loan, which lowers the monthly payment, which I don't like, and I would have to put the 20% down.
I dont have an agent as I am dealing directly with her. (she is an agent and has been great)
My gut reaction is to say no and wait this out until I qualify for a loan when I can file my income taxes in mid February. If the house is still around, great. Otherwise, I could lose out on the place.
What are your thoughts? Do you have experience with seller financing?