Buying a house

[Stradling]

9 hours ago, Brandon said:

yeah, if you're going to come in low make sure you have a reason like comps or repairs. not just because.

it's also a sellers market here, so unless there is something wrong, no one is really coming in low.

i never used to not respond though unless the offer was just garbage and they called to ask about it. even then they got an answer.

Well the house has been on the market for 40 days, no one is actually coming in at all on this house.  Making a bid 2% below isn't some slap in the face, it's a negotiation. They didn't counter because of the contingency not the dollar amount would be my guess. 

Brandon would know better than I would but in a sellers market wouldn't the agent simply list the house a little higher and see if there are takers at that price and try to get the comps on appraisal after the fact.  Obviously within reason.  

[Catwhoshatinthehat]

If 2% is a deal breaker for someone on a house then it probably isn't the house for them.  If you don't think it's worth that you could always still make the full offer then see what the appraisal comes in at.  That said my experience of buying a house was in a market where they lasted 1-2 days before they had multiple offers at asking or above but even if it was a slower market if it's a house I want I'd be fine going full asking.  

We'll most likely be listing our place contingent to us finding another place in the next ~3 months.  That's my preference anyways but right now we're getting through a wedding and I've come to the conclusion that weddings suck when you have to plan them, pay for them and are the people getting married.  We've already been pre-qualified but the bulk of our down payment will come from the sale of our place so we need it listed with an offer on it so we can make our own offer.  I'm not really looking forward to the process because it felt like another full time job the last time we bought but it is what it is.   

[Brandon]

1 hour ago, wopphil said:

I don't know that we were that low. We effectively offered $945 against a $970 asking price  (which we understand is likely to be reduced to $955 or $960 soon). At that price point, the difference is peanuts. Certainly close enough to warrant a counter from the seller. They may very well be overpriced, given that the house has been on the market for 40 days without any serious offers (according to their agent, that is).

i do think you should have gotten a counter, especially if it's been on the market 40 days. contingencies could be a deal breaker for them. after the crash there has been a huge influx of foreign cash offers and i can see an inexperienced or not wise agent telling their sellers that they should take a cash offer with no contingencies like it's the norm.

either way, have your agent follow up. that's their job and takes two seconds to pick up the phone and call the other agent.

[Brandon]

38 minutes ago, Stradling said:

Well the house has been on the market for 40 days, no one is actually coming in at all on this house.  Making a bid 2% below isn't some slap in the face, it's a negotiation. They didn't counter because of the contingency not the dollar amount would be my guess. 

Brandon would know better than I would but in a sellers market wouldn't the agent simply list the house a little higher and see if there are takers at that price and try to get the comps on appraisal after the fact.  Obviously within reason.  

possible, we are all just speculating here. it's easy for him to get an answer though.

in theory, that's how it used to work. you list a little higher knowing a buyer was going to come in a little lower than asking. i think was has changed the whole dynamic is simply the technology out there now. now consumers can be more educated or use a multitude of online tools to get information like comps, plus things like appraisals are almost automated now since the mortgage crash......part of the housing bubble issue back then was you used to be able to hire your own appraiser, so you call up your buddy and say "hey man, i need the appraisal to come in at this number" and they would literally inflate or decrease the value. now that's extremely illegal and any lender is going to use a neutral third party to facilitate the appraisal order. so these things are either easier to come by or just straight forward for people to look up.

[OCAngelsNotLAA]

We bought a house a little over a year ago and we have found some things out the hard way.  We had a home inspection done and they made some minor notes about certain issues but nothing too alarming. One big issue that came up that the inspection didn't uncover was in the master bathroom.  The whole house was remodeled when we bought it so everything looked brand new including the master bathroom.  The stand up shower in there had new tile and everything looked great.  Too bad they didn't hot mop(waterproof) the shower pan before tiling the shower.  This led to water leaking through the grout and into the walls surrounding the shower.  we had two big dressers up against the other side of the wall so we didn't notice the water damage until it was rather extensive.  One way to check if a tiled shower has been properly waterproofed is to cover the drain in the shower completely and see if the shower will hold the water.  Don't depend on the home warranty to cover all repairs either.  We had a gas line issue and tried to use the home warranty for it.  They sent out a company to check out the issue.  The company gave us a quote of $3k for the repair and the home warranty would contribute a whopping $250 towards the repair.  When we had the leaky shower pan they wouldn't cover any of the costs but our home owners insurance did.  I guess I was naïve for assuming the home warranty would be more beneficial then it really was. 

[Angel Dog and Beer]

Yeah be careful with the home warranties, make sure you read and understand all their exclusions. I used my HW to replace our heater. They paid 2k, I paid $600 because the old venting and a couple other items were not up to code. While it wasn't a huge hit, it was something I wasn't aware of.  Same with the water heater I had replaced as well, there was unexpected items needed for the repair that were not covered. They will only cover the basic replacement and equipment and nothing beyond that. Compare not only what's included between the different HW companies, but what they exclude as well. 

[wopphil]

Home warranty companies are perhaps the most fraudulent companies in operation. They are terrible. Nothing is covered in full. They pay their contractors nothing, which causes the contractors to tell you things aren't covered and/or to upsell you something that amounts to extortion. 

[Catwhoshatinthehat]

When I bought my place my realtor paid for my first home warranty and I renewed it twice.  I realized pretty quickly that it wasn't worth much as it didn't cover most of the big stuff.  It helps if you need someone to come out to do some real basic work but beyond that it was costing me money each year and a few years in the stuff that it would cover I could mostly do on my own or knew someone that could help me with it.  As far as the inspection goes I'm sure some of the pros can chime in and correct me but in my limited experience there's only so much they can check.  For my inspection the guy turned all the water faucets on at once to check pressure/drainage, got in the attic and got into everything he could but if there's a small leak, some termite damage and so on they may not catch it all depending where it is or how evident it is.  If it's your first time buying a place just make sure you have an emergency fund because things will go wrong.  All the years I rented there was very little we ever had to have the landlord take care of yet 5 years into owning I've had to do major plumbing work, termite work and the list keeps going.  

[ABC]

3 hours ago, wopphil said:

Good advice, thank you. I agree with you about the psychology of it all.  Sellers, oddly, seem to take it personal if you don't meet their asking price. Like its a reflection on them. Stupid.

Honestly, I was put off by the sellers and their agent. Their failure to counter our offer was essentially an "f-you" to us. I don't negotiate that way. And I dont want to bid against myself, either. As much as I want to buy the home, they need to sell it. It's a two-way street. My thought is that if the house is still available in two weeks, perhaps they will get more realistic. 

I am willing to increase my offer, but not by much.  The list price on the home is $970, and the realtor informed us the seller was contemplating lowering it to $955 or $960. I offered $925, but with my agent to eat 2-percent of the commission. So my offer was essentially the equivalent of $945. They have to know we will come up at least another $5. So we really aren't far apart. And given that the property has been on the market 40 days, they are probably a little over priced.

2

Sounds like the LA is inept.

How did you find your agent? In most cases the buyers agents will get 2.5% commission. If she is willing to drop her share to 0.5% (!!!),  then I don't think you have a sharp agent representing you. 

The seller might be a hard-ass. Sometimes you get sellers who think they know it all from pricing to negotiating. Not getting a counter now might be an indication of how reasonable they will be if you ask for repair credits. Let's say an $8K foundation issue gets uncovered during inspections...will the seller cover or at least contribute a few grand towards repairs? Will the seller drop the sales price if the appraisal comes in low? Usually, once the deal is in escrow, the hard-assness dissipates by 50% and sellers become a bit more reasonable. 

The question you have to ask yourself is at what price will you be pissed if the house sells tomorrow. If this is a house you really want and don't want to go through the home buying process much longer then be the bigger person and see your end goal of owning that home. Your agent should be advising you on comps and what the home might sell for. 

[wopphil]

My sister is my agent, thus the low commission. And I agree about the seller's agent. Clearly, the guy doesn't know how to sell/negotiate.

I asked my sister to reach out to the listing agent again today. I asked her to inquire as to why our offer wasn't countered and whether it would be a waste of time to offer another $5-10. 

[ABC]

2 hours ago, Catwhoshatinthehat said:

If 2% is a deal breaker for someone on a house then it probably isn't the house for them.  If you don't think it's worth that you could always still make the full offer then see what the appraisal comes in at.  That said my experience of buying a house was in a market where they lasted 1-2 days before they had multiple offers at asking or above but even if it was a slower market if it's a house I want I'd be fine going full asking.  

We'll most likely be listing our place contingent to us finding another place in the next ~3 months.  That's my preference anyways but right now we're getting through a wedding and I've come to the conclusion that weddings suck when you have to plan them, pay for them and are the people getting married.  We've already been pre-qualified but the bulk of our down payment will come from the sale of our place so we need it listed with an offer on it so we can make our own offer.  I'm not really looking forward to the process because it felt like another full time job the last time we bought but it is what it is.   

3

Contingent offers tend to not do well in this market. If possible, try to sell first and live with family for a few months. It's a PIA but your offer will have almost no chance at being considered on homes that get multiple offers.

Another option is to sell your house before making offers but ask for a lease-back from buyer. This will allow you to get your cash from the sale so that you can make non-contingent offers and still live in the home you just sold for a month or two at an agreed rate. The latter may affect your pool of buyers but in this sellers market many buyers are willing to make concessions, like lease-backs, to have their offer accepted. Just make sure you have an agent who knows how to present your home to buyers and set up lease-backs.

[ABC]

3 minutes ago, wopphil said:

My sister is my agent, thus the low commission. And I agree about the seller's agent. Clearly, the guy doesn't know how to sell/negotiate.

I asked my sister to reach out to the listing agent again today. I asked her to inquire as to why our offer wasn't countered and whether it would be a waste of time to offer another $5-10. 

 

Gotchya. I figured it might be a family member representing you. But that is still a significant gift she is extending to you. 

Keep us posted on what the seller side comes back with. My guess is that the LA is not skilled and has little influence on the seller. And seller is a prick. You sister may have to do much of the heavy lifting for the LA. She essentially has to arm the LA with comps and make a case for you. Ultimately, it's the seller's choice but things change every day in what a seller will accept. 

[Catwhoshatinthehat]

15 minutes ago, #CF8 said:

Contingent offers tend to not do well in this market. If possible, try to sell first and live with family for a few months. It's a PIA but your offer will have almost no chance at being considered on homes that get multiple offers.

Another option is to sell your house before making offers but ask for a lease-back from buyer. This will allow you to get your cash from the sale so that you can make non-contingent offers and still live in the home you just sold for a month or two at an agreed rate. The latter may affect your pool of buyers but in this sellers market many buyers are willing to make concessions, like lease-backs, to have their offer accepted. Just make sure you have an agent who knows how to present your home to buyers and set up lease-backs.

I'd rather live in the riverbed near Angel stadium than with family but I understand why you're making that recommendation.  Luckily we aren't in a situation where we need to move and us getting into a house is a luxury and not a necessity.  Our townhouse has appreciated 40% or more and us selling is using that to get the down payment while my goal has always been a house.  We love where we live so we want to stay in the same area but I just don't want shared walls otherwise I wouldn't be looking to move.  The agent we're working with is the same one we used last time and she said she had a few contingent sales in recent months.  She continues to send across places in our price range/location and I've seen that the desirable ones still go pretty quick which means we likely won't stack up as a contingency buyer.  I figure as long as we're honest with any buyer on our place that it's contingent on us finding a place and it's got to be the right place that that's about all we can do for now.  I don't want to string anyone along but we're also not going to settle just to get into a house.  I don't think I have enough gamble in me to actually sell even if there's a lease-back option because we could be looking for a while for a place. 

[ABC]

29 minutes ago, cezero said:

this thread is going to be very useful when i buy my first house later this year.

there's only about 1/5 as many houses on the market around here right now as there were a couple of years ago, so the business guys here at work are telling me to wait until the end of summer, or maybe even wait until next year. 

keep posting #CF8!

 

 

 

 

 

You should start your search for a good agent now. He will let you know why supply is tight and give you more info to determine if this is some uncanny market condition or if this is something you expect to continue. You don't have to commit to any agent but get someone knowledgeable to help you get a clear idea of the market. Plus, he can give you his business cards so when you go to open houses you can let the open house agent know you are represented and you will not get the hard sales press. A good agent doesn't need to be in the business for decades. In fact, agents with ten years in the business can be just as clueless as agents new to the industry. While newer agents might be better than the grizzled vet. You just have to ask questions and see how much you trust their skills.

Ask them how they would present your offer. Do they tell you things like becoming buddies with the LA? Offers that get accepted can go way beyond just sales price. 

[wopphil]

8 minutes ago, calscuf said:

Where to and why you moving Phil? 

Just looking to get into something bigger, with better schools. Gonna stay in Orange.

[ABC]

16 minutes ago, Catwhoshatinthehat said:

I'd rather live in the riverbed near Angel stadium than with family but I understand why you're making that recommendation.  Luckily we aren't in a situation where we need to move and us getting into a house is a luxury and not a necessity.  Our townhouse has appreciated 40% or more and us selling is using that to get the down payment while my goal has always been a house.  We love where we live so we want to stay in the same area but I just don't want shared walls otherwise I wouldn't be looking to move.  The agent we're working with is the same one we used last time and she said she had a few contingent sales in recent months.  She continues to send across places in our price range/location and I've seen that the desirable ones still go pretty quick which means we likely won't stack up as a contingency buyer.  I figure as long as we're honest with any buyer on our place that it's contingent on us finding a place and it's got to be the right place that that's about all we can do for now.  I don't want to string anyone along but we're also not going to settle just to get into a house.  I don't think I have enough gamble in me to actually sell even if there's a lease-back option because we could be looking for a while for a place. 

 

If you have your home in escrow and buyer has removed disclosure, inspection, and appraisal contingencies then your offer on the house will look better. But if you are making offers and you don't even have a buyer locked in then you might come off as someone who is not motivated to complete the transaction. If you have a buyer on the hook, see if they are willing to make their lender available for the sellers to confirm your buyer's ability to close on the loan. This should not be an issue because everyone wants to get the deal done and having confidence in the other parties goes a long way.

[Adam]

Phil, counter with another 3% discount. Fuck them!

[Catwhoshatinthehat]

4 minutes ago, #CF8 said:

If you have your home in escrow and buyer has removed disclosure, inspection, and appraisal contingencies then your offer on the house will look better. But if you are making offers and you don't even have a buyer locked in then you might come off as someone who is not motivated to complete the transaction. If you have a buyer on the hook, see if they are willing to make their lender available for the sellers to confirm your buyer's ability to close on the loan. This should not be an issue because everyone wants to get the deal done and having confidence in the other parties goes a long way.

Thanks for the info.  I assume that we will have a buyer locked in but we haven't moved past getting pre-qualified while we deal with the wedding.  Once we get past that I'm ready to list our place and get the process going but I'm not sure where my better half will be.  With all of the stress of the wedding she was talking about waiting longer to get into a house which I'm fine with but I also know that we can afford one now, don't have kids yet and in that regard things won't get any easier in the next few years.

[wopphil]

14 minutes ago, calscuf said:

Yeah, we've considered the same thing.  The demographics at the local schools are, uh, a bit skewed.  For now we're going to be sending our kids to private school.

Did you have another kid? 

Your schools are probably similar to ours. It is my understanding that given the poor performance of the schools, the No Child Left Behind law gave us the absolute right to a transfer (which we have done). But it is my understanding that that right is being taken away, and so we are no longer guaranteed transfers to better schools. So we will eventually need to move. It isn't anything urgent, but certainly something that we need to do in the three or four years.

[ABC]

9 hours ago, #CF8 said:

Home buying tip #9:

Always get a home inspection. You will read this everywhere. It's golden advice.

Also pay $200 for a sewer line inspection. And get a chimney guy out there if house has a chimney. If home inspection or seller's disclosures show any electrical, plumbing, roof or foundations concerns, get a specialist or general contractor out there, too. And if you're on a hill, spend the cash for a geologist.

 

If the house if large, think about getting a HERS test to see if the HVAC is working properly. I didn't mention this earlier because it's almost a given but have a termite pro come out there as well. 

Even the house is new construction or a complete remodel have the house well inspected.

[ABC]

2 hours ago, OCAngelsNotLAA said:

We bought a house a little over a year ago and we have found some things out the hard way.  We had a home inspection done and they made some minor notes about certain issues but nothing too alarming. One big issue that came up that the inspection didn't uncover was in the master bathroom.  The whole house was remodeled when we bought it so everything looked brand new including the master bathroom.  The stand up shower in there had new tile and everything looked great.  Too bad they didn't hot mop(waterproof) the shower pan before tiling the shower.  This led to water leaking through the grout and into the walls surrounding the shower.  we had two big dressers up against the other side of the wall so we didn't notice the water damage until it was rather extensive.  One way to check if a tiled shower has been properly waterproofed is to cover the drain in the shower completely and see if the shower will hold the water.  Don't depend on the home warranty to cover all repairs either.  We had a gas line issue and tried to use the home warranty for it.  They sent out a company to check out the issue.  The company gave us a quote of $3k for the repair and the home warranty would contribute a whopping $250 towards the repair.  When we had the leaky shower pan they wouldn't cover any of the costs but our home owners insurance did.  I guess I was naïve for assuming the home warranty would be more beneficial then it really was. 

 

When buying a remodeled home, during inspections period find out who the general contractor was and call him. If something goes wrong after purchase, he should be responsive to help fix shoddy work because his license could be on the line. Find out what was permitted; Ask the GC for exactly what he got permits on, AND pull the permits from the city yourself. Talk to another GC and find out if anything was missed. You will be surprised what GCs can get away with or they simply forget. 

[Adam]

oh shit lol

[Stradling]

9 minutes ago, calscuf said:

My wife is pregnant, so #2 will be joining us in October.  I don't know anything about the right to choose a better school.

But man, a million dollars is a lot of money to make sure your kids don't marry Mexicans, but I guess it's a necessity in OC these days.

Move to Norco.  I paid $745k for a great neighborhood, 6 bedroom 4 bath, 4600 sq ft home on half an acre.  

[Adam]

Buy my house for $1 Million. You can live next door to the fat kid from iCarly

[Blarg]

2 hours ago, wopphil said:

My sister is my agent, thus the low commission. And I agree about the seller's agent. Clearly, the guy doesn't know how to sell/negotiate.

I asked my sister to reach out to the listing agent again today. I asked her to inquire as to why our offer wasn't countered and whether it would be a waste of time to offer another $5-10. 

I don't think five or ten dollars is a real conversation starter.