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    Monday, March 29, 2021

    Real Estate: Rising interest rates IS a big deal for many...

    Real Estate: Rising interest rates IS a big deal for many...


    Rising interest rates IS a big deal for many...

    Posted: 29 Mar 2021 06:14 AM PDT

    Getting frustrated by comments that constantly repeat things like "interest rates are still ridiculously low," "a quarter percentage increase is no big deal," etc. For those of us financing the majority of an expensive home, it can make a huge difference, especially when house prices are still going up every week.

    I realize some people aren't financing as much as I am (~$650k, FTHB in HCOL area), but it feels a bit patronizing to constantly read that it shouldn't concern me. Every quarter percentage increase is costing me ~$100/month, and that's a pretty significant imposition on my budget. The difference between now and when I first tried to buy a house is effectively a car loan...

    Maybe rising rates won't have a big effect on demand, at least until/unless they skyrocket, but they will definitely have a big effect on people's budgets and will continue stacking the market against FTHBs.

    EDIT:

    To clarify, it's not that we'd foreclose if we spent another $100. It's just that we've budgeted for every dollar we make (including fun spend), so every $100 difference cuts into those budgets. And we don't know how many more months we'll be trying to buy a house—approaching month 3—and therefore how many more hundreds we'll rack up in additional interest rate costs. It's not like we can't adjust our goals, but it just sucks that we have to. I know I'm in a privileged position to even make that complaint, so I hope that doesn't come across wrong. I know other people have it much harder right now.

    I also realize that house expenses, like property taxes, go up over time. We have salary adjustments on the horizon, including yearly cost-of-living raises. I also get a significant bonus, which we don't budget for and which can contribute toward unexpected house costs. But some of these comments have made me pause and consider how steeply those costs might increase.

    Lastly, rereading my post, I can see that I used some inflated language like "huge difference" and "significant imposition." I can see why these kinds of phrases result in an equal/opposite reaction from those who (imo) downplay the effects of interest rates. Also, as u/Long_Fish1973 pointed out, I probably should've explicitly said that I'm upset about rising interest rates because it's less money I can save, invest, etc. Maybe these kinds of interest rate fluctuations are par for the course in real estate, but I'm a FTHB and only know that this market feels depressing and unfair, and people just keep bidding higher and higher while rates and prices go up, making me feel increasingly convinced I'm getting priced out of my home state. So I'm feeling really dejected right now, hence why I felt the need to post this in the first place.

    submitted by /u/call-me-kitkat
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    Houses not flying off the shelves this past week

    Posted: 29 Mar 2021 02:13 AM PDT

    Anyone else notice this? In my zip code houses have come on the market at ridiculous prices and have just sat for the entire week. Anyone else seeing this trend? Could inventory continue to accumulate this week causing some markets to stabilize or even come down a little in April?!

    submitted by /u/CherryManhattan
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    Turns out I have a septic tank. What are my options?

    Posted: 29 Mar 2021 07:45 AM PDT

    I closed on my house in November and haven't had any major issues. When I was looking at this house, my realtor told me that the house was on "community well and community septic" and that the HOA fee covered the "community water and community sewer".

    Additionally the owners disclosure and buy sell agreement have all of the septic tank sections marked "N/A Community septic".

    This would all be well and good, except a previous owner of my house (for 20 years) showed up on my doorstep looking for long lost property in an attic and told me a lot of things about the house. The most important thing he told me was where my septic tank was. He showed me that I DO NOT have a community septic system and I have a private tank and drain field in my back yard. The tank is completely buried but after he showed me it's easy to identify the access ports.

    So I obviously want to get the system inspected and pumped. But my question is, do I have any legal recourse? I'd like to just send the bills to my realtor and tell her to pay for this inspection, but I'm not sure that will work out. Has anyone heard of anything like this happening? If the inspection turns up nothing, it's probably not worth fighting over, but if the inspection uncovers major issues what should I be doing?

    submitted by /u/WantsToLikeThePixel
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    [CA] So-Cal First Time Home Buyers Offer Accepted

    Posted: 28 Mar 2021 09:49 PM PDT

    First time home buyers in Southern California. Decided to jump into the market earlier than planned due to low interest rates . We viewed over 30 properties over the course of the last 6 weeks and placed and lost 18 offers. Our 19th offer just got accepted. We were very discouraged after experiencing first hand how competitive the current market is. Ultimately we won with a $45k (5%) over list offer with reduced loan and inspection contingency periods, no appraisal contingency, and 30 day rent back period PITI. Have been lurking this sub the whole time to get a gauge for other home buyers' struggles and tips. My experience has mostly been in agreement with others, however it is still possible to get a somewhat reasonable offer accepted, considering we have been losing to $100K+ over list, waived contingencies, cash offers for the most part. Hoping the inspection report is relatively clean and crossing our fingers that the property appraises but are ready and willing to cover the difference. I know we are fortunate to be in this position and just wanted to give a data point.

    submitted by /u/TheBearJew137
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    Appraisal Question

    Posted: 29 Mar 2021 07:21 AM PDT

    How often are people seeing appraisals not go for their sales price or asking? It's two different metrics since we all know how often houses are going way over asking.

    submitted by /u/Long_Fish1973
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    Putting an offer on a pre-listing. How normal are these cracks?

    Posted: 29 Mar 2021 07:59 AM PDT

    My real-estate agent got us an appt to view a home before it's listed. No disclosures from the seller at this point. I see cracks around 50% of the home's windows. Home is just under 20 years old. There are some cracks on the garage floor as well.

    https://imgur.com/a/OnCqh3f

    The real-estate agent is very well regarded in the area, and she says the cracks are very normal (settlement). She also encouraged me to get an inspection done to hear it from an expert which I definitely plan to do. But I'd like to get as many opinions as possible. Is this a cosmetic issue, or am I looking at expensive repairs in the future?

    submitted by /u/sunghan
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    [Landlord-MD] Can i rent out my townhouse without the basement?

    Posted: 29 Mar 2021 07:29 AM PDT

    I own a 2 floors and a basement with a separate entrance. We're moving out of the state for work purposes for about a year (worst case scenario ~ 3 years) and I want to rent out the two floors without the basement just so i can have a place to stay in when we come back(roughly once every two weeks) to visit my family. The basement has the washer/dryer right next to the separate entrance door then there's another door that will be locked when i am not home.

    This is my first time becoming a landlord yayyy haha and i would like to know if it's possible that i can rent out the 2 floors without the basement? And can i share with the tenants the washer/dryer Or should i just install a new washer/dryer somewhere upstairs?

    submitted by /u/Ehappyy
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    FSBO condo first time, not living there buy it's costing me $700/month, where should I advertise? Zillow, Craigslist, Fizber, Redfin, what else?

    Posted: 29 Mar 2021 06:51 AM PDT

    I inherited a condo I'm not living in that I'm paying ~$700/month in taxes and HOA to hang on to it, I could afford to hang onto it but it's literally just burning up money each month so I want to sell it asap without paying a realtor like 7%. It's in good condition and ready for someone to buy. I work for myself and live near the condo so I have a ton of flexibility in my schedule to show people the place, take pictures, write up listings, etc. I've never sold real estate before but have sold loads of non-real estate on Craigslist, Ebay and Amazon so I'm not opposed to haggling.

    1.) Where else should I advertise? So far listed on: Zillow, Craigslist, Fizber and Redfin.

    2.) How many views & saves should I expect in the first 2 weeks of listing to indicate whether I should drop or hold my price? I have very little competition in my area as per Zillow, the unit is worth around $140-160k. I got literally 1 message from a buyer after a week and they didn't follow up.

    3.) Right now I'm just using the low res ~1024x768 photos the previous owner had on Zillow. Is it worth take better quality photos? Is a virtual/360 view of a condo worth making? I understand there's open source software out there for doing this. I have a 4k quadcopter, is aerial video of the complex worth posting? Mostly retired old people live at this complex so I'm not sure how much potential buyers would value borderline professional quality images & video.

    submitted by /u/ppp_sole
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    Backing out of refinancing, waiting 6 months. Fees?

    Posted: 29 Mar 2021 07:55 AM PDT

    We have been waiting to close on a VA refi for almost six months. The lender is a well regarded local bank, and their standard response is that they are overwhelmed with demand and everyone is working from home due to covid. That was a reasonable response, for awhile, but as we come close to the 6 month mark - it's just not reasonable anymore.

    We've been putting some other things on hold while we wait to do this, and frankly at this point I've lost all faith in the lender.

    So my question is this: I know it's not unheard of to pay fees when exiting a loan, they did after all do credit checks and stuff. There was no inspection or title search as this is a VA Streamline Refi (IRRRL). However, since they were unable to actually complete the loan in a very unreasonable amount of time - should I fight the fees? Is there an agency that would oversee/arbitrate this?

    Thanks for any info.

    submitted by /u/karenmcsharon
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    First Time Homebuyer Definition Questions

    Posted: 29 Mar 2021 07:48 AM PDT

    Why is the phrase First Time Homebuyer typically defined as someone who has not owned a home in three or more years? To me that phrase should refer to someone who has never owned a home period.

    To all the Econ minded people out there, are there more benefits/incentives to getting more "actual" first time homebuyers to own homes vs the current FTHB defined people? Should the government provide more incentives (above those currently out there) to get this certain group of people into owning a primary home? Thanks!

    submitted by /u/AlabamaGeorgiaLine
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    Is "abandoning" open permits something you have seen before?

    Posted: 29 Mar 2021 03:52 AM PDT

    Just wondering. Closing was supposed to be today, but the house had five open permits. Lawyer called the city on Friday, and the city abandoned two the same day. They were from the previous owner before the seller and issued in 1999 and 2005. They just abandoned a fourth one this morning from 2007.

    I'm not complaining, but just wondering if this is typical for old permits and if anyone has had it bite them later on down the road since inspectors aren't checking the work.

    submitted by /u/BeMadTV
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    Hey guys,we’re in a bit of trouble

    Posted: 29 Mar 2021 09:45 AM PDT

    So long story short,my fiancé's dad's house(who has passed) is ready to sell,but on the affidavit it lists my fiancé and her 17 year old sister which would be fine we are just gonna split the profits but her sister doesn't have an ID,no license,no state ID,nothing so our problem is trying to sell the house when one of the people needed to sign off on it can barely prove she exists

    submitted by /u/Long-Bread-3635
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    Quicky/Rocket makes big $$$ bet on rates dropping.

    Posted: 29 Mar 2021 09:38 AM PDT

    Email spam sent to mortgage brokers this morning.

    Remember a company like that is going to do what it does to maximize profits, period, and then it's the job of the marketing department to spin it in such a way that it's a positive. Do not get distracted by the "great option for clients looking at..." part, that's just the marking folks putting a spin on it.

    Context:

    If you do a 6 month rate lock today at say X.375% for a given scenario and amount of fees, and then rates fall, to X.000% for same, in 5 months, they get to do an internal re-lock and sell that mortgage for a premium based on future-current market conditions (Wall Street will say "Oh, rates are X.000% and you got a bunch of suckers to take X.375%? TAKE MY MONEY DOT JPG" when buying a mortgage backed security full of that). They might do an illusionary "float down" and offer you X.25%, but they still come out ahead, bottom line (this is how all float downs work, at literally every lender I have ever encountered that offered them).

    And if rates go the other direction, they would either just hit their normal profit margin on the back end sale, or maybe take a slight loss. It is of course not an even hedge, they are smart and have the cards stacked in their favor either way.

    But most of those cards are stacked towards them gaining the greatest advantage should rates fall by year end.

    Note: this isn't a Quicky pitch. Whatever your scenario, whatever the rate, calling Rocket/Quicken will typically result in you paying 1.5 to 2.25 points above market norms in fees, for that exact same rate. Click on "legal disclosures" here and read it for yourself in the small print -- 2.25 points as of today, 3.29.2021. Rockets are expensive.

    Unrelated to Quicken, Barry Habib is a guy that has multiple crystal balls. There is a mortgage industry "crystal ball award," the trophy is a literal crystal ball, and he's won it several times. His speaking things are mostly sponsored (he gets big bucks to do a webinar for your organization), and I do not think they are accessible to the general public who is not a member of this group or that as I am. He also thinks rates will go up for a bit, but by year's end they will be somewhere between whatever high point they reach in coming months, and the low points of 2020.

    ACTION ITEM FOR HOMEBUYER interested in day-trading their home mortgage (which you of course should not do under any circumstances, and making such a choice based on some idiot's thread on reddit is certainly not advisable): Instead of asking about the rate and APR, ask about fees. How low can you get them? Is $0 available? How about -$1000, what if I have the lender covering my appraisal fee and some title/escrow charges? Waffling between $0 in lender fees and -$1000 is a choice between how big you are willing to bet that both the crystal ball dude, and the largest lender in the country by volume, are correct. Right now, paying points, paying an underwriting fee greater than zero dollars, buying down your rate, etc, is a bet that both crystal ball dude and Rocket are wrong (2.25 points right now, as disclosed in the above link, is certainly absurd). If you believe you will only have a mortgage for 7 or 9 months, the rate matters not, the lowest fees is what matters more than anything. Note also, as an FYI, that "take a slight rate bump for lowered fees" will have a greater interest rate impact for smaller loan sizes, and a smaller interest rate impact for larger loan sizes.

    submitted by /u/aardy
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    “CDC extends eviction moratorium until June 30”

    Posted: 29 Mar 2021 09:02 AM PDT

    FYI.

    submitted by /u/Rmzrad
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    Using appraisal contingency as an excuse to back out

    Posted: 29 Mar 2021 09:00 AM PDT

    Disclaimer: I am in the San Francisco Bay Area- I know these numbers are insane, but they are the reality of living here and I have lived here most of my life; I realize I am very lucky.

    I recently had an offer accepted for a 3/3 condo in Redwood Shores for its list price of 1.198. 3 bedrooms under 1.2 are rare in our target locations, so I went in quick despite it not being my favorite. Tried to be practical versus romantic about the decision. However (of course) in the past week and a half I've seen 4 different 3/2 properties (all beautiful) become available all around 1.15. We had even seen one of the units and loved it, but figured it would go above our budget of 1.2 so we went for the less nice condo thinking it would be a safer bet. Of course 11 days later Nice condo is still chilling on the market.

    We kept our appraisal contingency, and should be getting our appraisal back in the next few days. If it comes in under, is it a terrible idea to back out ? I keep telling myself better 1 in the hand than 2 in the bush... But the normal buyers remorse coupled with FOMO is a doozy! Its true... comparison is the thief of joy.

    Thank you for your advice, and hopefully a bit of a reality check!

    submitted by /u/doodle_donut
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    Brookfield New Construction Norcal - rules

    Posted: 29 Mar 2021 08:59 AM PDT

    We have blocked a new construction home in an up an coming area in northern California Bay Area. Given the outrageous demand and crazy bidding happening everywhere, we were not given ANY list price discounts or incentives (upgrades credits), while also paying an further marked up price. There are only 8 homes including 3 models after ours remaining to be sold in this 200 home neighborhood.

    Here is a pro/con (need some help understanding the impact of cons!):

    Pros: - convenient location close to public transport and shops - amenities included (with HOA fee) like gym, pool, club and several parks / outdoor spaces around - new home with 1 yr warranty ((10 structural) - home comes with some outdoor space (not a lot) - seeing the demand right now, it looks to be very much favored - relatively spacious floorplan

    Cons: - high price and buying at some of the highest price in the neighborhood - 3 level house (might be difficult with aging parents / future kids) - HOA is likely to increase - security : the are reports of security issues in the area like unwanted porch stalkers and package thefts because of how openly the area can be accessed. it is not gated. However the police station is just next to community so they are quick to respond. - there is an earthquake hazard disclosure - there is a liquification hazard disclosure - there is a soil / groundwater chemical contamination disclosure - as it was a military chemical dumping site previously with the info that the builder treated the land too make it for residential use prior to building on it. The community gets its tap water from a different location though. But it's possible if there are traces in the ground, they may be vaporized seep into structures built there. This one is worrying to me. - builder will not allow pre framing inspections by a third party stating only the buyers are allowed to come in for preframing walk through. They do allow an independent pre-closing inspection, at our cost. - schools : the elementary / middle / high schools are ranked 6/7/9. We don't have kids yet but it is a future consideration still. - in the model we were shown a beautiful stand alone bathtub in the master. But now they're saying due to plumbing decisions that will no longer be offered. - No pantry

    I'm having serious misgivings about it now. Everyone seems to think we're lucky to get the much coveted lot and that I should not feel bad about having to pay through our nose for it. But I keep thinking about all the others who bought at much better prices (~100k lower) not six months ago at the same place. + More concerns listed above.

    If the community could help us think through these concerns it'd be so helpful. As first time buyers our heads are spinning at this point.

    submitted by /u/A2019CA
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    Project idea feedback

    Posted: 29 Mar 2021 08:55 AM PDT

    Hello everyone,

    I am doing a project for a class where we come up with a new buis. Idea and try to flesh it out etc. As a permanent pandemic consequence, many businesses are increasing virtual workers and reducing office space.

    One idea we had was to convert spaces (possible ones that are no longer offices) into a sort of workspace where people who work at home can focus. The model could have coffee and snack bar, with personal offices and more communal areas.

    What's your honest opinions. Any potential? This is just some market research I'm doing and appreciate any opinions.

    Thank you!

    submitted by /u/jbiscan2120
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    With these Lumber Prices, Why does the US Mainly Build Timberframed Single Family Houses Compared to Europe, Asia and South America Building them with Masonry?

    Posted: 28 Mar 2021 08:24 PM PDT

    New Landlord bought house and is asking us to leave?

    Posted: 29 Mar 2021 08:18 AM PDT

    Living in a town house. The other tenant is staying but the new landlord wants to end our lease early and is asking us to vacate by the end of the month. Is there anything we can do to extend our stay while we look for a new space? Any fine print I'm missing that says he can't do this?

    submitted by /u/ptarvs
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    how would you approach a neighbour that is overdoing the whole non permitted suites/ units on his property ?

    Posted: 28 Mar 2021 11:28 PM PDT

    We have a guy that has not only has an irregular 2nd home on his 1/2 acre lot, but is also now making plans to build a 3rd home on wheel in his front yard. Obviously this is a against the bylaws in almost any city, including ours, but it's pretty sticky calling the city bylaws and getting them involved. You still have to live beside the guy. I will point out he is also generally an A-hole (dog runs free on our yard and he gossips about us and others, and lies to use about stuff the few times we talked to him) . He kind of has this attitude that "we better get used it it" I mean, we are pretty relaxed but that is just to much of a hit on our privacy value, rights, and privacy. I can't imagine in a million years thinking I am so much above the rules.

    Has anyone ever found a way to deal with something like. We are trying to think bout bringing in a mediator or just being open in the community about this. We figure he just knows we are to nice and want to become rats and we would look horrible to other people that would only know his side of the story.

    In my mind when you do something you check the zoning and bylaws, and if you going to break the rules you don't do so at annoyance to someone else. I guess that is not the case with typical a-holes.

    submitted by /u/homestead1111
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    Getting conflicting information on the flood zone status of a home we are considering. Advice appreciated!

    Posted: 29 Mar 2021 08:09 AM PDT

    The property has a nice stream on it, however the stream is about 30 feet below the elevation of the home's foundation. Just based off of how high the home is in situated in comparison to the rest of the area, it really looks like it would have to be a flood of biblical proportions for it to ever be in danger. The entire street that the house is on runs along the top of a pretty tall hill, which slopes down to the stream and then slopes back up to another very large hill on the opposite side of the stream. That is strictly my laymen's observation, however.

    According to FEMA's maps, the stream is a narrow band of Zone A in the middle of an area that otherwise has little to no risk for flooding. In fact, I can't find any evidence that there has ever been any flooding in the area. However, according to FEMA, the house is at the very edge of the band of Zone A. Here is an image showing the area and the home location.

    The selling agent is telling us, however, that the current owners DO NOT have to pay flood insurance every month. They went through some process proving that it was not at risk of flooding and have not been required to carry it since. My agent wasn't really sure about this and was going to look into it. While she did that, I figured I would check here as well. I'm very hesitant to buy into a home that is in a flood zone, but at the same time, this is pretty much our dream home and at a pretty competitive price for the area. Thank you for any advice that you can give me!

    submitted by /u/hibbert0604
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    Backup offer success stories?

    Posted: 29 Mar 2021 06:28 AM PDT

    My husband and I have been looking for a house since August. We got under contract on one in October, but the inspection revealed extensive foundation problems. Last week we found a house that we loved and checked every single one of our boxes. We have a conventional loan, put in an offer 15k over ask, offering 30d seller occupancy after closing, huge earnest money deposit, no negotiation on inspection items under $1500, and $1000 appraisal gap coverage. That was Wednesday, the day after it was posted.

    Sellers decided to wait until Sunday to review offers and we didn't hear back until this morning. They went with an offer that was very slightly above ours and offered us 1st back up. Despite trying our hardest not to get our hopes up, we are really bummed out. How often do contracts fall through/ do you have any back up offer success stories in this current market?

    submitted by /u/dogmotherhood
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    Charleston, SC

    Posted: 29 Mar 2021 06:24 AM PDT

    Hello, I am reaching out for advice or general feedback on my process thus far. Little background: I have been actively looking since January this year for a home. My lease is up at my apartment in July.

    I have submitted 4 offers so far for homes that were in my approval range (400k and under). I have constructed my offers with no contingencies other than bank requirements (appraisal/inspection). My offers have gone above the list price by as much as $15,000.

    Example, had my eye on a home that went under contract yesterday. I offered $11,000 over the list price because it was not in an HOA neighborhood and it was a melting pot of older/newer homes. I was concerned about the appraisal, but not too bad because I have the funds to cover a difference of 10-15k if I need to.

    My 4th offer yesterday had no contingencies, even told the seller they can keep all appliances they want to keep. I asked for zero closing costs, sent a personalized offer letter, sent all financing documents (pre approval, and source of funds), and offered to even buy the appliances from them after the closing in case they didn't want to take them. My earnest money was $10,000.

    Found out this morning that I did not get the offer acceptance. Is there something that I am doing wrong, or is there any additional ways that I can beef up my future offers? I feel like I am being very generous with the offers in this crazy market, but any advice is greatly appreciated.

    My 600 square foot apartment is driving me insane and I would like to be in a home by the time my lease is up. Thank you in advance for any insight you can provide!

    submitted by /u/NJS1993
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