All Forum Posts by: Patrick Britton

@Anthony Simboli question: do you think ANY offer without a home inspection or overpaying by way of appraisal gap coverages is a smart investment? and i've had my fair share of non-refundable EMD and it rarely makes a difference to the seller. they want as much money right now and no chance of failure. So you know what, forget them! find something else because you're chasing price and that's always a sure way to lose money.

You don't have to play in a market that's lost its damn mind.  Let someone else make a terrible mistake that they'll regret for years to come.  

i can think of loads of reasons why one might not want to buy in WA state, but frankly i think you're focusing on the tree bark of a single tree while the entire forest is on fire.  

@Misael Carlos Vera ok so looks like everyone is giving you high fives for getting pre-approved.  with all due respect and this is NOTHING against you, but pre-approvals are WORTHLESS.  idiot lenders and morons real estate agents think they are important (they never say why) but presumably it's because they BELIEVE it carries weight.  it does not.  Have a close look at your pre-approval letter and i guarantee it'll say something along the lines of, "this letter is conditional...final approval from an underwriter."  

Trust me, i WAS a lender and pre-approval letters mean nothing.  so please, for your own sake, don't start the parade yet.  you're on step 2 of 50 and a million things can go wrong, and even when they go right, that doesnt mean it's time to retire.  

@Alex Mares  that happens all the time.  depending on the local customs you might just have to back out, or at least ask for a lot off the offer price.  realtors make mistakes every day, and this could be a simple and innocent one made by a rookie agent.  

sometimes agents and SELLERS need to know what counts towards gross living area and what does not

@Christine Smith  there's a good chance something happened to the appraiser or his/her family.  i know of someone out here who got COVID and had to be on a vent for a few days and the lender/borrowers are freaking out, so they just found another appraiser and all is ok.  

@Bryan Rodas  most investors and realtors don't bother attempting to consider making adjustments.  to do so requires an understanding of statistics that goes way beyond the brain capacity of most investors and realtors.  Heck, most appraisers are lazy and make significant and poor assumptions about most adjustments.  It's a hyper-local issue as well.  For instance, years ago i was able to determine the difference in price between a 1 bathroom and 2 bathroom house, all else equal, was about $70,000 in Seattle WA.  Well, in the southside of Chicago IL it's closer to $9,000.  

Also, keep in mind that appraisers are paid to provide an opinion of value.  It's just an opinion so no two appraisers will arrive at the same conclusion, although if they've both been trained correctly the difference should be within 5% to 10% (max).  

Suffice it to say that in most parts of the country, the process is relatively similar:

1.) start by looking at solds within 0.5 miles (or within the same neighborhood/subdivision, etc.)

2.  go back no further than 6 months (Covid might require adjustments to 12 months but that depends on the area)

3.  weed out properties that are significantly different from the subject property in terms of size, number of beds, baths, lot size)

4.  weed out properties that are significantly different in terms of condition (fixer vs. new construction) and type of sale (short sale vs. foreclosure vs. conventional)

5.  weed out properties whose style is significantly different from the subject.  so think about excluding tudor homes if the subject is a craftsman.

After all that you should be left with just a few very good comparables.  from there it's okay to make some minor adjustments but valuing properties is an artistic science.  and it takes a lot of practice and effort to eventually get a reasonably accurate price range and interestingly, there's really no "right" answer.  the market will determine what is "right" but just because the market says something is worth X right now is no guarantee that 1.) it's truly correct and 2.) it's repeatable

Also, there's a massive amount of human judgement required.  At the end of the day it's a best guess and unfortunately, it's not always going to be the "answer" you're looking for.  

@Matt M. might not be that difficult for you, but it can and is for "most" people.  Based only on your reply, you might be the exception to the general rule of thumb. 

@Thomas Mosely you don't need to pay anyone to help you over the "hump."  PLEASE know that doing ANY due diligence puts you ahead of 90% of all real estate investors out there already.  Unless you make a number of massive, horrific mistakes at the same time, you'll be fine.  

It is my humble opinion that investors will (subconsciously) attempt to pay someone else to help them overcome their fear of missing out, making a mistake, losing money, being humiliated, or whatever.  Some investors believe that if they pay somebody enough money this fear will go away. This payment is dressed up as a course or a mentorship or something fancy. But it's just a way of trying to rid their fear through money.  For some it works, for others it doesn't. 

Either way, you don't need to pay anyone any amount of money to overcome something that only you can truly overcome by yourself. 

@Austin Negron any decent, literate, high school graduate loan officer should be able to warn borrowers about this long before it becomes a problem.  too bad most MLOs can't tie their own shoes...

@Lien Vuong yeah, he could "try" for a conventional loan but now he needs 25% vs. 3.5%.  

@Account Closed i think you hit the nail on the head.  But in BP's defense, BP is just a forum for experts and morons alike to share ideas, experiences, and a55hole opinions.  so the info is often only as good as the one providing it, which is prone to biases, fallacies and straight up focked up assumptions.