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    Friday, February 19, 2021

    Real Estate: !~~Contingencies Mega Thread~~!

    Real Estate: !~~Contingencies Mega Thread~~!


    !~~Contingencies Mega Thread~~!

    Posted: 18 Feb 2021 10:11 PM PST

    Hello!

    In response to the plethora of "omg should I remove such-and-such contingency or contingencies?! What does it all mean!!!!!!?" threads, I thought we could consolidate.

    Realtors, real estate lawyers, and experienced homebuyers/sellers, this is your time to shine. Please mention the state(s) you operate in early/prominently in your post so folks will have an idea if what you are saying is relevant to them (f. ex, I imagine some Texans will mention "options," which generally aren't relevant to folks outside of Texas in real estate contexts, so it would be useful to mention that you're a Texan when doing your write-up!), and give a 3rd person's perspective (ie, not an "is my specific real estate salesperson just chasing a commission check?" perspective, since folks already have that, from their specific real estate salesperson) on what the main contingencies are, what the risks are, what the upsides are, how probably you think the various outcomes are, and that sort of thing. Anecdotes and experiences would be great too, including from folks who aren't necessarily in the industry professionally.

    To the readers, please construe nothing in this thread as any sort of real estate or legal advice whatsoever, of course defer to YOUR trusted professionals that YOU have selected, and assume everyone on reddit is an incompetent fool who knows nothing, and whose advise you should certainly never take.

    And then the democratic process of upvotes, and so on, will let things get sorted as they may.

    submitted by /u/aardy
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    NE PA Closed

    Posted: 19 Feb 2021 04:17 AM PST

    Found a property 1800 square foot in the sub 300k range built in 1987. about 0.3 acres, none development. Listed for 285, offered 297, and got it for 290. Mortgage company got me 7k discount, 2k cash back from the seller, and paid the seller 3k additional.

    I did inspection and found some minor issues. Got cash back for those repairs. House built and owned by elderly couple. House is beautiful ranch with a basement and sun room. I have minimal work to do in terms of updating. Public utilities.

    We started looking in October. Lost out on 2 offers in NJ. Decided to look across the pond in PA. Missed out on offer for brand new home there. Was about to pause search but decided to see a couple more. Long story short. Got it.

    My mortgage is conventional 20% down, 30 years at 2.5.

    submitted by /u/vasquca1
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    (SF Bay Area) First Offer Accepted, Closing Tomorrow

    Posted: 18 Feb 2021 04:17 PM PST

    I felt compelled to post our own anecdote for the slightest counterbalance to the overall frenzied tone of the rest of this subreddit right now. We close tomorrow, and made a grand total of one offer in one of the hottest markets in the country.

    It is still possible to get lucky!

    You are welcome to say we are overpaying or whatever for even participating in this market, but we had planned to buy now years in advance, and don't believe in timing the market. Prices could tank tomorrow, or continue to skyrocket, and I'm not prophetic enough to know which, but it doesn't materially affect us since we plan to stay 10-15 years and can easily afford what we paid.

    Details: First time homebuyers on the easternmost edge of the SF Bay Area. 4/3 two-story townhome from the 80's in good shape. Ugly outside, pretty inside. $595k list. 5 minutes to my work. Absurdly high PUD/HOA dues ($400/month), but with a well-funded reserve at least.

    Offer: $610k, 5% down (with 3% EMD), no inspection or loan contingencies, 3 week escrow, and we would pay for all the nickle and dime HOA transfer stuff and county natural hazard disclosures. Our lender is local, and personally called the seller's agent to tell them our offer would be very smooth to close. We shopped around a lot, and using a local lender left some money on the table for closing costs, but not rate, and with as absolutely smoothly as it has gone, I feel like we got our money's worth. We did not waive appraisal, but it came in at $615k pretty quickly. Our offer was within 72 hours of the property listing and we had approximately 4 competing.

    Waiving inspection was the most stressful, but we decided to for a few reasons:

    1. The sellers provided the very rosy inspection from when they purchased, almost exactly two years ago, along with documentation for when they fixed damn near everything that those inspectors found. Visually, the home was immaculate. Obviously you can't trust a seller's inspection, but the past inspection company was legit.

    2. Some cyber sleuthing on the sellers revealed that they were likely in a much less expensive house than they could likely afford. Any maintenance that came up would have had less chance of being deferred, and indeed within the last two years that had purchased a new central heating unit and water heater.

    3. As long as any repairs needed are not truly catastrophic, we could afford them. Our buyer's agent also includes a home warranty for a tiny bit of help here as well as a gift to her clients.

    4. The PUD which will cover many of the big repairs you might worry about with an inspection: exterior, roof, foundation. I.e., many of the catastrophic cases.

    Of course we still ordered a home and pest inspection for our own information. Fortunately, we were vindicated in waiving that contingency, as the most major issue was a door that scrapes the floor and needs to be sanded down.

    The most stressful part of escrow was actually today, because our credit union nearly wired closing money to the wrong account, contrary to our written instructions. Time for a new bank!

    submitted by /u/kobo1d
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    Buying a Home and Seller (Developer) May Not Perform within Escrow Period (Los Angeles, CA)

    Posted: 19 Feb 2021 10:22 AM PST

    I'm in escrow for a SFH, new build, supposed to close 3/1 and I purchased the house through the listing agent.

    Apparently, the final permit for the new build has not been signed off by the city and therefore, has no certificate of occupancy. I was assured by the agent that this would be done within the escrow close period, regardless, the seller/developer counter-signed the 3/1 close.

    Now I'm being told the city continues to lag (due to Covid) and they may not be able to close by 3/1.

    I've terminated my lease to align with the close of escrow date that was contractually agreed to so now I'm going to have to incur additional costs and I'm looking for advise of now I can push to get compensated for the seller not being able to perform.

    1. Find a month-to-month lease somewhere in Los Angeles that's big enough for two people to WFH comfortable. M2M leases are expensive for a decent place in LA.

    2. I may have to pay a moving company twice. Once to move to the temporary place then another time to move into the house that is being purchased.

    3. The seller is offering me $100 per day stipend. I find this ridiculous since this is significantly less than what I'd need to pay for the seller not being able to perform. Per the seller, he shouldn't have to pay $xx if we're "ONLY" a few days past the escrow close date.

    What type of compensation seems fair to ask from the seller? What can be done through legal channels if the seller isn't able to close by the close date of escrow? This is extremely frustrating and since my agent is double-dipping and he has a relationship with the seller, I take all of his advice with a grain of salt.

    Thanks for the advice!

    submitted by /u/kwitit
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    Would home insurance cover burst pipes caused by extreme weather?

    Posted: 19 Feb 2021 09:45 AM PST

    Like those happening in Texas.

    submitted by /u/pookiemon
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    Quitclaimdeed

    Posted: 19 Feb 2021 09:45 AM PST

    My friend and I purchased a condo together almost 3 years ago. She has recently decided to move and let me keep the condo. I am currently in the process of refinancing the loan for it to be just under my name. My question is do I also need to file a quitclaim deed as well?

    submitted by /u/meperdi
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    Need some advice

    Posted: 19 Feb 2021 09:00 AM PST

    Hello!!!👋👋👋 I am an aspiring real estate agent currently enrolled in my pre-licensing class. I'm about halfway through. Throughout the pandemic, I've been relying on the gig economy to live. I've been doing it full time and up until this point have been able to keep my head above water. The flexibility has been hugely beneficial in allowing me to take my classes and to plan my own schedule. Unfortunately, lately my income has been falling and I need to explore other options.

    So here's the question. I am in one of the hot real estate markets in the country right now. Are there any real estate adjacent jobs that you would recommend where I can get in quickly and make enough to sustain myself until I get my license and even beyond. The keyword here is quickly. I don't have time to obtain another license like a surveyor or appraiser right now. I'm well aware that I won't be making money from real estate immediately and have planned on about a year buffer before I'm making a substantial income. What I'm looking for is a job that can get me into the industry somewhat and provide an income from now until I get to that point. I have done some searching on indeed and found many firms that claim to offer a lot more money than is reasonable to be expected as somebody who is new or is in the process of obtaining their license. I'm highly skeptical of these because to me they seem very predatory.

    Any and all advice is greatly appreciated. Thanks everybody!

    submitted by /u/timeforsmthngnew
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    When is foreclosure wave coming?

    Posted: 19 Feb 2021 08:58 AM PST

    People are out of work, I hear banks are already requesting BPOs. When do we expect foreclosures to actually hit the market?

    We're in Los Angeles, and the market is insane right now with virtually no inventory. We just got beat on a house that went 120k over asking, the last house went for 100k over asking.

    submitted by /u/mellowyellowc2m
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    Most liberal medium to small towns in the US?

    Posted: 19 Feb 2021 07:36 AM PST

    This might be the wrong board to ask, but I'm looking to move. I'm an artist and looking for a liberal town to relocate to. I'd like to spend under 400k for a freestanding house with some land. Does this even exist anymore? Any suggestions would be helpful.

    If this is the wrong board, please direct me to the right one.

    submitted by /u/nursebad
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    Do older houses appreciate slower?

    Posted: 19 Feb 2021 10:44 AM PST

    Will a house built in 1970 appreciate slower than a house built in 1990 or 2000?

    submitted by /u/JustGetRichToday
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    Selling house, still getting refinance offers

    Posted: 19 Feb 2021 10:43 AM PST

    I'm a week away from closing on the sale of my house, all contingencies removed, just waiting for buyer's loan to fund...and yet I'm still getting refinance offers from my lender. Do they not realize I'm selling the house and therefore paying off the mortgage? I've been letting my agent handle most everything, so I'm not sure exactly when during the sale process the seller's lender is apprised of the sale, but this just seems kinda dumb.

    submitted by /u/AsheratOfTheSea
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    Thank you gift for inspector?

    Posted: 19 Feb 2021 10:38 AM PST

    We put in a back up offer on a pending house & it was accepted when the other sale fell through. I randomly contacted the inspector who had just performed an inspection for the previous buyers. He reached out to them & asked for permission, then gave us the inspection report free of charge. Not sure what kind of gift (how much?) to include in my thank you, but I feel a note isn't quite enough.

    submitted by /u/LIT45239
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    Advice/insight - owner occupied duplex

    Posted: 19 Feb 2021 10:31 AM PST

    Me: single, 34 years old, male, western Washington state. I love my job, and love my town, and would love to purchase a home and feel settled in my community. However, on a single income that's not very high, my real estate options feel limited in my moderately high cost of living area.

    Finances: Gross income of 64k per year. No debt, credit score of 809, contributing 20% to retirement. Savings: about $50k split between a HYSA and some low risk investments, currently saving about 2k/month to try to build up a bigger down payment.

    Real estate: - Small (<800 square foot, 1-2 bed 1 bath) single family homes in my town that are run down and in need of some fixing up are infrequently on the market, and usually around 300-350k when they do pop up. This is beyond my budget and while I could likely make it work, it wouldn't leave me with much financial wiggle room/stability. - Small single family homes outside of town in the county (30-45 min drive out) are slightly more affordable, but relatively rare. I also don't love the idea of being very far from town. I have a great community in town and as a single person, I'd prefer to be more closely connected to my social circle and not have a substantial drive every time I want to see them. - a 1 bed 1 ba condo is typically selling between 215k - 275k with HOA fees of between $200-450 per month. Unfortunately, though, having a yard is important to me for my dog and my enjoyment of gardening.

    Since what I want (small 2 bd 1 ba SFH) is simply not available at a price I can afford, I'm realizing I have to make some compromises and smart financial decisions in order to potentially make what I want a reality in the future. Lately I'm considering purchasing a duplex and occupying half while renting out the other half. I've read a lot about this route, but it seems that most markets where people are doing this have duplexes for sale that are significantly cheaper than my market and also somehow a higher rental market so the numbers make a lot more sense?

    I've been watching my market for the past few months and it seems like duplexes with 2bd/1ba units are selling for between 500-600k. Rental income would be about $1400/month per unit with the current market. This would put me at being responsible for making up ~1400/month difference on a 550k property with 5% down using an FHA loan (I'll also note that my area has a VERY low vacancy rate - I would anticipate minimal problems finding renters!). I can afford this on my own, but it wouldn't allow me to save much money (it's similar to a payment on one of those small, run down 300k properties), and I'd likely get a roommate for the first year or two. My thought is that in 5 years, rental prices will likely increase to the point that it ends up being a lower out of pocket cost for me (+ refinancing to get rid of PMI when possible), and a next move of purchasing a SFH will be more realistic with an investment property on my side.

    As much research as I have done, I still feel totally clueless - Is this a ridiculously stupid idea? A great idea? I'm not super interested in becoming a big real estate investor, but i'm intrigued with this idea of having an income generating property in the future.

    Advise? Insight? Wisdom? Other ideas/recommendations? Should I abandon all hope of owning a home in my market? Thanks!

    submitted by /u/blushedbutter
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    Lock in mortgage rate before finding a house?

    Posted: 19 Feb 2021 10:31 AM PST

    Is this possible? Rates are rising kinda spooking me a bit, eroding my purchase price.

    submitted by /u/Responsible-Ad3073
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    Home re-inspection question

    Posted: 19 Feb 2021 10:23 AM PST

    Hello!

    We are in the middle of a refi, and we had some issues on our appraisal. Effectively there are foundation issues that existed before we purchased the property. The foundation has been stabilized and we had an engineer take a look and confirm the stability before we bought (April 2019). With the refi, the appraiser called out the same issues, and we had an engineer come out to reaffirm that the property is stable and safe and no additional work is needed.

    The appraiser is now saying they need to come back out to the property to confirm the engineer's findings and charge an additional $175 for the reinspection. They are saying it's their protocol and they won't sign off until they're reinspected. But how is some inspector more qualified than a certified engineer to assess the soundness of the structure? Shouldn't an expert opinion negate the inspector's assessment? Do I have any recourse here or do I have to pay them and waste more time if I want my appraisal finalized?

    I am in Oregon if that helps.

    Thanks!

    submitted by /u/rdwikoff
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    How do I buy a house with cash earned under the table (I am paid by the hour and tips. I do not trust banks at all)

    Posted: 19 Feb 2021 10:10 AM PST

    earned money under the table) I don't trust banks. I have no bank account I get paid by the hour and in tips I have saved enough up living with my mom to buy my own place. the thing is I would have to pay In cash my family says you can't do that I do not trust banks to give them my money. How do I buy a home without one of these guys tryna take a piece of my cake. just want to buy a home with the cash I earned how do I do this without some asshole trying to steal the money I earned (government,banks ,irs, real estate agents) I don't want to buy a home off of some scumbag real estate agent who gets all my money taken away from me my boss always paid me in cash and I always hid it away and now I feel like I worked for nothing because I can't do nothing with the money I have I feel like if I buy a house in paper and get robbed by the irs what was the point of working all those years I am a young guy so i never second guessed it I always just saved all the 20s 5s 10s and 100s I had. now I feel this virtual currency shit is making it so that hard working people like me can't make it in this world can't even buy a house with the cash I earned they wanna keep hard working people like me down at the bottom this is why I don't trust banks how do I go around these middle men and buy a home for myself with paper also I have a home that I own but it is rented so I can not live there it is part of my income but the bad part is the renters pay in cash and it seems as tho cash is no good now a days ? The system is all fucked up

    submitted by /u/Teleportdinero_
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    Homeside - Lower.com App Experience

    Posted: 19 Feb 2021 10:06 AM PST

    I'm buying a home through lower.com and they will match $1000 if I put in $1000 to go toward the closing costs.

    Does anyone have any experience with this app? I've Googled the company and can't find any negative reviews from their service, but I want to see if others have experience with it.

    submitted by /u/Caitzilla_
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    VA: Closed on house and discovered bank appraisal was based on incorrect information

    Posted: 19 Feb 2021 10:04 AM PST

    I recently closed on a house purchase. In Alexandria, VA.

    The home was appraised by the bank as having 2 parking spaces to the rear of the property. After we closed and moved in, we discovered not only do the parking spaces belong to one of our neighbors but one of the previous owners took the neighbor to court over it and lost.

    Parking spaces are pretty valuable in this neighborhood and would have definitely changed the property valuation.

    Thankfully my wife and I are care free but it would have been nice to have those spaces for our future guests and technically it would have been part of our property.

    Am I just out of luck here?

    Edit: Thanks for the responses. I'll check the deed/title.

    submitted by /u/MrMartinP
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    Condition of home affect sale price?

    Posted: 19 Feb 2021 06:15 AM PST

    I found a house in SF Bay Area we want to make an offer on. Obviously the crazy market mean a bidding war well over $1M+.

    This house definitely needs a lot of work as it's 45+ yrs since last remodel per description and it shows. To make a competitive bid, my agent says to go by price per sq ft with recent comps.

    However, all the recent sales have newer updated houses. Remodeled kitchen, bathrooms, flooring etc.

    So generally speaking, shouldn't an older house that needs renovation sell for less than the comps of nearby houses with renovations already done?

    submitted by /u/eddie269
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    Prepaid closing costs, can seller write check instead for repairs?

    Posted: 19 Feb 2021 08:50 AM PST

    In process of buying a home, USA. We found some smallish issues and are planning on asking for money to repair (instead of them doing it since I can control the quality of contractor). Normally what I read is that people just ask for a credit against closing costs but our closing costs are already covered due to a grant. Can we just ask the seller writes a check for the amount of repairs at closing ~5k

    Thanks!

    submitted by /u/MurkyMurkyMurkyMurky
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    Appraisal Follow Up

    Posted: 19 Feb 2021 04:29 AM PST

    If an appraisal comes back low and I am willing to make a consession as a seller... is it better for me to lower the selling price or give a buyers credit for that amount?

    Seems that I will benefit (and the buyer would too) if I lower the asking price. I am thinking less tax for both of us and less commission for me.

    What's the best course of action for a seller when a home doesn't appraise?

    Edit: typo

    submitted by /u/bertrola
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    Can I get a mortgage through my own company?

    Posted: 19 Feb 2021 08:04 AM PST

    Not sure if this is the correct place to ask this, as this is also my first post...

    I'm a (new) mortgage underwriter (was promoted in December from processing) and I was wondering if I would be able to get a mortgage through my own company? I am looking to purchase a home probably in the fall and want to get an idea of how I can do this by then.

    I know a processor at my company who was considering getting a loan with our company at one point and it seemed like my company was okay with it, but I'm not sure if underwriters would be allowed to do this since they tend to have more personal relationships with other underwriters (being that UWs typically can't talk directly to borrowers).

    I do have a backup plan in case this isn't possible, but I would like to obviously work with a lender I know I can trust.

    Any and all input is gladly accepted! I'm based in NJ if this makes a difference. This is also a private lender.

    submitted by /u/cljinvesting
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    Sewage analysis came back

    Posted: 19 Feb 2021 07:57 AM PST

    Had a sewage backup/flood couple months ago. It leaked onto finished framing that we found out was not pressure treated. Got wood samples swabbed and tested from the framing, the only thing that came back maybe problematic was Aspergillis Penicillium spore estimate was "heavy" with 9200 spore count in one room and 1300 spore count in another room. Is this bad? What do I need to know about this? Also, no E. Coli or "Group D" Enterococcus detected, are those the only bacteria that should be tested for after a sewage leak?

    submitted by /u/rockemulator2
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    homesteading land in the mountains

    Posted: 18 Feb 2021 04:47 PM PST

    I want to buy a small parcel of land for homesteading in the mountains, as high elevation as I can get, put down a yurt or two, some solar panels, grow some food, and be left alone. If it's raw land, I'd like to keep it under $200k, but if it has a crappy little house and I can get a conventional mortgage, I could budget up to $400k. Really not looking for anything fancy.

    Any recommendations for towns or areas? I've been looking near the Great Smoky Mountain national park in TN but open to anywhere that has elevation, water, and solitude, and won't bother me about a yurt and living off the land, collecting rainwater.

    Thanks in advance!

    submitted by /u/dp__
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