All Forum Posts by: Marian Smith

Thanks for the replies. I guess the problem is I don't want it that bad. I was thinking about offering 70-75% for a house in the 100k range. I had thought of the repair list, but the repairs don't add up to the discount I want :) The price is too high or it would have sold by now, 90 days+.

60% off is a steep discount, Ron. Was the first offer for 25k or did they just take the 30k offer? Foundation problems, termites, rot or just a lot of work?

With today's interest rates it just isn't very attractive for young buyers to go for the sweat equity when for less than $200 more a month they can buy a move-in ready place. And sweat equity costs cash AND sweat.

I am surprised at the answers here. I assumed there were huge problems for banks owning condos in Florida. Condo fees (holding costs) being one and financing for buyers being the other. "Warrantable" condos, which I believe is the term for condos banks will loan money on because they are conforming loans, require owner occupant rates, vacancy rates, complex has to be completely built out, etc... If the buyers have to pay cash, then the buyer pool shrinks considerably, I would assume. Maybe that is why the Fed is so insistant upon proping up Wall St.-- so investors can make money, cash out and buy Florida condos.

Last REO I purchased I offered, I think, 72k on an 89k listing with 90+ days on the market. My rational was something like 1) the listing agreement expired in a week or so, 2)original principal loaned was 76k in 2004 3) had been marked down one or twice and was due for a markdown soon so I might as well take the 8-10k markdown and then ask for more.

I represented myself but I am a new realtor (and I basically got my license because I couldn't find a realtor who would make a bid on a HUD for less than 5%.)

So.... REO World told the listing broker that they couln't go below 78k without "going to the bank management". Which they ended up doing.

Listing broker implied that the "thing to do" is to wait until a listing is reduced to within 10-12% of what I am willing to pay and then make an offer. But he was very nice and happy to unload the dog.

So it sounds like the asset managers have a certain window for which they are authorized to take less than list price. Either that or they always say they have to go to bank management like car salesmen do just to test your negotiating skills or resolve.

I have been looking at the MLS solds and I just don't see that many large gaps between list price and sold price.

I am under the impression that HUD home will go for 87% of list unless they have been sitting there for a couple of months because HUD would rather reduce the price and try to get more competition--so I guess for a HUD that has been on the extended list for 2 months you could offer list minus 10% or whatever the usual markdown is and then something above 87% of that number.

But what about the banks? Any magic numbers? Is BOA more desperate than Chase or viceversa? Also, my last offer was cash. What is that worth? And is a preapproved loan with Chase for say 75k accompanied with a copy of an untapped HELOC for 100k and a brokerage account statement with 100k in assets and an offer Not Contingent upon loan approval as good as a cash offer?

DePotier? on Design to Sell never, ever places a couch in front of a window, maybe two chairs flanking it. Big no, no on her show.
And people like symmetry, so the twin bed partially covering the window bothers me. Also makes it seem the bed doesn't fit. Nitpicky, but you asked.
Model homes around here always have a theme in the kid bedrooms. I am told it is to help buyers looking at lots of homes remember "the house with the surfer bedroom." Not recommending a theme, but maybe something somewhere a little out of the ordinary to differentiate your house in the buyers' memory. I used to see breakfast tea trays on the master bed, for example.
All in all, very nice house.

Cellulose 5 years ago, husband fed the hopper and I blew it in place. He looked like a teddy bear at the end. Called 3W Insulation for a bid this summer. Had 13 inches of fiberglass installed on another house for the price I paid for materials last time--it was actually cheaper, I think. I'm in Austin and it has been over 100 for 6 weeks I think, so it was a good buy.

Ask a mortgage person. My insurance company is Amica and they will not insure more than 4 properties including my home. Fannie and Freddie have a limit to how many loans they will insure/buy or whatever they do per investor. So over that number would be "non-conforming" but I cannot recall what the number is. Ask a loan person. It may just come down to your cash reserves and the property appraisal--buying and renting to your dad who has guaranteed income doesn't seem risky to me and it may not seem risky to an underwriter either.

Gary Eldred is a Phd and was on the faculty at Stanford business school. He wrote "Investing in Real Estate." It is not an inspirational book like some of the others, but just explains the whys and hows, etc. in plain language written for someone who can read at the collegiate level. Smaller print and packed with information.
Also, print off an IRS 1040 schedule d or e or whichever it is and read the instructions on how to report rental income.

I like to spray with Brush-be-Gone or Roundup and then spray any new sprouts during the growing season. Once the tree is dead let it rot a year and then just yank it out with your bare hands.

I actually haven't turned the utilities on yet, so I don't know if I've got a big problem or not. One thing though, my insurance company, Amica, wouldn't write me a policy because i didn't have an inspection so couldn't estimate the roof age, etc. Cost me an extra $300 a year to go with a "subprime?" insurer. Actually, part of the $300 is due to the house being vacant, but when it is rented I can switch to a lower priced policy, but not $300 lower.
I would have liked to have an inspection but I wasn't going to pay $500 without utilities. Plus, I didn't think the bank would be very open to more negotiations. I may have left money on the table, but I just felt like I might nix the deal if I came back for more. Comments?
Also, I felt that once I had a 10k reduction that it left me some room for a new hvac or whatever was wrong. I did call the MUD office and they assured me that the water bill for the house was stable and very ordinary in price.
I might add that my final price was 56% of a house that sold a few weeks later directly across the street. 50 sq ft larger and, of course, in much, much nicer condition.

I recently bought a house without an inspection. It was bank owned and quite a mess—evidently the occupants had to be evicted. 1250 square feet 3-2-2 with half the popcorn removed from the den cathedral ceiling, missing upper kitchen cabinet doors, laminate flooring installed without cutting the door jambs or installing quarter round (so gaps), electrical outlets painted over, a large crack in the one-piece fiberglass tub/shower that had been epoxied over, a broken window and lots of general grime. The master bath was lightly primed over so you could still see one black wall, one pink and two peach colored walls. It was a house of never finished projects.
Anyway, I am a newly licensed real estate agent so I represented myself and made a cash offer. After we settled on a price I asked the listing agent to have the utilities turned on for the inspection. They were never turned on and I never got a satisfactory answer as to why not. At one point I decided that maybe the utility companies wouldn’t turn them on because the evicted people didn’t pay their bills and as the bank owned the property they were being held responsible from the time they foreclosed. Does this happen??? I asked the agent if it was a problem with unpaid bills and he said yes, but then I realized I had lead him there so I’d never really know. Then I thought maybe the listing agents pay to have the utilities turned on out of their compensation package. ??? Lastly, I thought maybe he was afraid I’d back out and wanted to wait until after it looked like I’d lose my earnest money , 1k, if I backed out.
So, I decided to go over the house myself to see if there was anything I couldn’t live with. The HVAC looked original 1977, the roof looked good inside and out, I knew there was a tub leak and the inspector could’nt tell me what I’d find behind the tub anyway. Then I noticed a slope in the front bedroom floor. I used a 4 foot level and determined there was a slope and then put the level on the window sill and it too was sloped and in the same direction. But the area is solid limestone and you never see foundation work around there, so I called a foundation company to ask how to tell if it is a bad pour, or what was an acceptable slope when pouring concrete for a house. He ended up coming out, said the house was built on fill dirt and he wrote up a bid to repair the foundation for just under 10k. I asked the bank for the foundation repair money and 2k for collateral damage from the repair. They agreed so I took the house without an inspection. I am not repairing the foundation because it isn’t that noticeable and I plan to rent the place out anyway. When it is paid off 15 years down the road I will decide whether to repair or just disclose it when selling.