Home buying thread

I just fought foreclosure from fannie Mae and it took 30 some days from my initial offer to closing.

Everyone says don"t mess with foreclosures or short sales if you are in a hurry, but maybe that"s only in certain regions or certain banks. My sister just bought a short sale earlier this year and she put in an offer on Monday and put in the offer she needed an answer by Friday. She got one and they closed in the normal window of about a month.

My shop foreman did the same thing on a foreclosure not long ago as well.

I don"t know if it matters how long it"s been foreclosed or how long the bank has had it.

Out of curiosity, how much did you guys offer on the foreclosure versus what the bank was asking for?

I"m looking at a property now that the initial asking price was 104k. It"s been sitting there for over 40 days now and they just dropped it to 93.6k. I was thinking of offering 70k.

TheCutlery said:

Nope. Bought a foreclosure, bid on a foreclosure before that, and everyone know personally who"s done the same has had the same experiences.

With a short sale, you at least get the owner"s sign off on it as communication before you wait for the bank, and have kind of an intermediary you can talk to. With the bank, it"s nothing but silence, or at least was 2 years ago when I bought.

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The Cut is right. It took 62 days from my offer to be countered by the bank, and then another 2 weeks to hear an approval. After that however, it took another 2 weeks to get them to turn on the water to allow a inspection. Ended up walking away due to a relocation, but we aren"t holding our breath.

Our new area has many short sells/foreclosures in the area we are looking at. As we know the time line now, our lease on our temp house here ends in May 2012, we are already shopping for a home, and if we go for a foreclosure, we will put an offer in by September as to have something done by March I imagine.

Those of you with tenants - can you give me some insight in to how that works out? I know the potential horror stories obviously .. but I mean pros and cons from people who have actually lived it (say downstairs tenants in a primary residence)

I ended up meeting with people and crunching numbers.. seems at this point by myself I can well afford to purchase a house as long as I keep my goals moderate (300k - for some that would be :O but the area average price is 312k - that being my entire county not just a given town)

I end up having $1k + a month in my pocket after all bills / expenditures are accounted for, with just my base salary no overtime (overtime is plentiful, as of now for this year I have almost 200 hours)

Really my only goal with the house is a finished basement that I can get some tenants in. That would easily give me $2k+ a month base, in my pocket. I"m just curious what i"m in for.

As I said, I can quite easily afford it on my own, with no tenants - but with $10k in property tax being the norm around here, I want someone else to eat that as opposed to me throwing money in the fire.

I also think i"m going to go for it, sometime this year. Interest rates certainly have an upward pressure right now.. and a 30k reduction in a home price can easily be offset by a .4% interest rate hike which isn"t unrealistic. So.. seems like a good time.

Is it really plausible to offer 20% below asking however? I know the whole "whats the worst that can happen" (I bought a car 2 years ago on a lowball for 22.5k and drove it 15k miles and sold it recently for 24.5k) but am I just wasting everyones time in doing so?

Chaotic said:

Is it really plausible to offer 20% below asking however? I know the whole "whats the worst that can happen" (I bought a car 2 years ago on a lowball for 22.5k and drove it 15k miles and sold it recently for 24.5k) but am I just wasting everyones time in doing so?

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Nothingbadwill happen unless you really, really want the place. Your lowball offer may end up provoking an emotional reaction that leads to them not even presenting you with a counteroffer. Unless your offer is just obnoxious you aren"t wasting your time in trying to get a favorable offer in.

How long has it been on the market? How many times have they already lowered the price, if at all? How long have they owned it? Take a look at the listing and try and gauge how effective a significantly lower offer might be.

Lefazz said:

Out of curiosity, how much did you guys offer on the foreclosure versus what the bank was asking for?

I"m looking at a property now that the initial asking price was 104k. It"s been sitting there for over 40 days now and they just dropped it to 93.6k. I was thinking of offering 70k.

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It might work differently in other areas, but here"s what was/is happening here. I was working with an agent and her agency was picking up lots of foreclosures to list. The local banks would have a big dump of houses every two weeks or so and divinde them up with several agencies. She got paid to go out and evict the people and make sure the house was in shape to show.

They listed it for XX, if it didn"t get an offer they accepted in the first 30 days they dropped the price 10% right off the bat on every one of them. After another 60 days they dropped it another 10%. So 20% total after 90 days.

She would flat tell you if you didn"t like the price to look at the date it was listed and count ahead 30 or 60 days and wait for it to come down.

She would also tell me if she knew how much was actually owed on the house. In one case I was shocked because I had looked at a house that was selling for $200k before it was foreclosed. After it foreclosed they dropped the price to $145k and I looked again. She said that they were asking what exactly was owed. So apparently the first owner let his house sit for sale for almost a year at $200k even tho he owed less than $150k and let it go to foreclosure. Doesn"t sound very smart to me.

That doesn"t help with what to offer, but they can only say no and you can put a maximum date to get back to you. I wouldn"t make an open ended offer. Put a time out that you have to hear something either yes or no.

Like I said in an earlier post I know both my sister and my shop foreman bought houses that were either in foreclosure or short sale and they didn"t take any longer than a regular sale.

It may have to do with who holds the mortgate, either local bank or national bank etc....

Fender said:

Nothingbadwill happen unless you really, really want the place. Your lowball offer may end up provoking an emotional reaction that leads to them not even presenting you with a counteroffer. Unless your offer is just obnoxious you aren"t wasting your time in trying to get a favorable offer in.

How long has it been on the market? How many times have they already lowered the price, if at all? How long have they owned it? Take a look at the listing and try and gauge how effective a significantly lower offer might be.

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I say make a low offer, they can only say no and you can come back and up your offer later if you want.

The problem you will run into on a fair number of houses will be they owe just about wht they are asking and can"t come up with the cash difference if they sell for 20% less for instance. But you never know till you offer. If you know how long they"ve lived there (can look it up at the tax assesors office - something your agent can/should do for you) can help you decide if they probably owe a lot or actually have some equity in it etc...

People who have owned their house a number of years and have equity and are taking a relocation are just about the best chance of them taking a lowball offer in my experience. But if you are dealing with an agent you likely won"t find all that out, if you are buying from a home owner you can pick up a lot of useful info.

Make whatever offer you feel like and even if they counter down 60% of a lowball if youre not comfortable don"t move an inch

I would be mortgage strapped as hell right now if I had listened to my realtor/banker about offering.

Does the 1k+ account for all your monthly expenditures? I know I still spend over 1k/month on random activities/entertainment/trips/food/etc.

If you"re looking at 300k+ homes, I"d say there"s a good chance you could get a much lower offer. Maybe not 20%, but between 15-20% is usually a good starting point to offer. They might come back at a 10% drop... it"s basic negotiating, you are giving them an offer you know they won"t accept (unless they"re desperate), and it shouldn"t be too much that they won"t counteroffer.

If it was me, I"d probably offer 250k (rather than 240k, which would be 20%). 250 doesn"t sound as bad whereas 240 would seem like you"re trying to gouge them. It also depends on the home and what YOU think it"s actually worth. And before settling anything, you should really have it inspected and make sure any repairs are done by the seller at their expense.

My in-laws just purchased a new home and the basement had higher then normal Radon levels. The owners had to rectify the problem before they closed. There were also some other issues with a tree branch damaging the roof etc, all of this was fixed before closing.

I purchased my foreclosed home 2 years ago sept.. It was listed at 124,900 I made an offer for 90. They accepted another offer. That fell through, they took the 90 immediately. Looking back though, I should have offered 70; I think they would have accepted that.

Not sure if this was already answered here or what, but have a rather specific question about this pertaining to getting a mortgage in canada that I hope someone can answer. This might apply to US mortgages as well, but maybe not.

So me and my wife have decided to look into purchasing our first home in the next 6-12 months. However, we are greatly considering moving to the east coast for a few reasons, mostly because our money will get us so much more out there than buying a home here (Think Toronto area moving to NB most likely moncton). The difference is truly astronomical as to what we could afford otherwise.

Now my questions are as follows:

Assuming everything is in order, such as credit/down payment/ debt ratio - Is it possible without ever having owned a home before (IE no previous mortgage/equity in a house) to get approved for a mortgage and move across country to buy right away? Or will we need to move, establish some history there (employment, banking), and then purchase down the road? In terms of employment history, my wife is able to take a transfer with the same employer/position/salary at any time really, but I will be finding something new. Even if I find a position pre move will banks be reluctant to allow us a mortgage as I will still be probational in whatever work I find?

I"m mostly looking for the typical way this is handled. I know in the US this is not uncommon, but If we have to move, rent for a year, and then buy, thats fine. However, if it"s not that crazy to get approved here and fly down for a week to house hunt/close before we move, I would like to know the ups and downs before going in to our bank, as we are both rather inexperienced with this stuff and the big banks here tend to fuck young people around (we are both mid-late 20s).

In the US I can tell you that they want to see that you have a job and have held a job for a certain period of time (usually a year or thereabouts) in the area you are planning to buy the home. There can be mitigating circumstances like how much of a down payment you are putting down, how much savings you have built up, and is the new job you are getting just a transfer within the company or something...

But that"s mostly for the US.


To be honest even if a bank would give you a loan I would reccomend not taking it without living and working in the area for a year or 2. Living there would allow you to get a better idea of the flow of traffic, locations of best schools, areas in decline or incline and distance to entertainment.

Yeah, I figured that would be exactly the case.

In terms of finding the location/area that is best, I have a bit of an edge on this as two friends of ours moved out there about 18 months ago and are living in the city, so at least that way we will have assistance in narrowing down the MLS listings prior to even going out there to look.

But thanks for the input, in terms of down, it would be about 20%, not sure if that makes a difference.

I think if you have more than 25% down you don"t need CMHC insurance, maybe even 20%, so you"ll get a touch better rate.

As far as getting approved for a loan, as was mentioned, you"ll need proof of employment and income to get approved for any kind of mortgage. So if your wife is taking a transfer and you"ll be finding something new, they will likely be reluctant to pre-approve you for a mortgage based upon both of your incomes. Depending on how much you need for a mortgage and how much coin the wife brings in, you might be okay or you might not be.

Talk to a mortgage broker like Dominion:Dominion Lending Centres

Don"t just ask your bank for a mortgage, get a broker to shop around for you.

Eomer said:

Talk to a mortgage broker like Dominion:Dominion Lending Centres

Don"t just ask your bank for a mortgage, get a broker to shop around for you.

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Thanks for that link, really helped me to figure out what we can afford, and what she could afford on her income alone which might actually not be a bad idea if it means we can skip the year of renting once we get out there, because honestly with relocation costs and other shit that could eat through our down payment quickly if we had to end up renting again.

Back in early 2008 I had put in an offer for a new house built by a retired Marine Colonel and his son. The finishing wasn"t completely done, and I offered pretty close to his asking price. It came down to us bickering over $3,000 for some of the stuff that hadn"t been completed that I would have to do. I told him that it was a good deal, listed the items and costs of unfinished items, and that holding out would increase his holding costs, and sent him my last offer signed and ready to roll.

He refused, so I walked. His agent called me several times the next few weeks asking if I reconsidered. I told her it was in both of their interests to accept my offer as it was fair and that it was her job to convince her client, but she kept pushing for the extra 3 grand, saying the owner was firm on that number.

Over 1 year later, driving by, the house was still for sale, at LESS than what my last offer had been (more than my first), which means he lost a bunch more in holding costs, property taxes, loan interest, insurance, etc...

It was a sweet custom home, good community (even had a boat ramp on the lake), and I still wish I had bought it. I don"t know if it"s my fault or the bitch agent"s, but I"m willing to bet it was the agent (she doesn"t have to worry about his costs, just the selling price), though that doesn"t make sense either - she would have done better by accepting the offer then moving on to her next house.

Oh well. Take from it what you will, just a story.

It was him, not the agent. An agent makes next to zero money from selling a home for more money. They"re all about volume and quick sales. There"s virtually no incentive for them to get a better price. Freakonomics has a chapter on it that statistically showed homes that are on the market owned by agents tend to be there for twice as long and sell for more, because in those cases they DO have an incentive to get a better price.

Do Sellers" Brokers Raise Or Reduce Home Prices? Evidence Of Agency Costs From An Unusual Real Estate Market

Our central finding is that, when listings are not tied to brokerage services, a seller's use of a broker reduces the selling price of the typical home by 5.9 to 7.7 percent, which is consistent with the presence of a fairly severe principal-agent problem. There is also some indication that a seller's use of a broker reduces the initial asking price and accelerates the sale.

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Fuck real estate agents. Fuck them in the ear. They"re barely a step up from used car salesmen. When my parents were looking to sell our childhood home 10 years ago the agent tried to convince my dad to list the house for 30% less than what he sold it for within 5 days, to someone living down the street who heard through word of mouth. He likely could have sold the place for 40-50% more than what the agent wanted him to list it for.