White House proposes aid for underwater homeowners Kathleen Pender Wednesday, February 1, 2012 The Obama administration on Wednesday detailed its new proposal to let some homeowners with mortgages not owned by Fannie Mae or Freddie Mac refinance into a new loan backed by the Federal Housing Administration, even if they are underwater and have low credit scores.
The proposal, if approved by Congress, would slap a government guarantee on a lot of risky mortgages that are not government-guaranteed today. The White House says it would impose a "small" fee on large financial institutions to cover the cost of the program, which it estimates at $5 billon to $10 billion.
The plan is designed to help underwater borrowers who are ineligible for the government's Home Affordable Refinance Program. HARP was recently expanded to let homeowners whose loans were purchased by Fannie or Freddie before June 1, 2009, refinance into a new Fannie- or Freddie-backed loan no matter how far underwater they are, as long as they are current on their payments and have a source of income. That expansion was made without congressional approval.
Homeowners whose mortgages were not sold to Fannie or Freddie - because they were too large, too low-quality or for other reasons - don't qualify for HARP.
That includes a lot of people in the Bay Area, where more than half of home-purchase loans made between 2004 and 2007 exceeded the Fannie/Freddie loan-size limits then in effect, according to DataQuick.
Under the new proposal, borrowers without Fannie/Freddie loans could refinance into an FHA-backed loan if:
-- They have missed no mortgage payments in the last six months and no more than one in the past 12 months.
-- They have a minimum FICO score of 580. Anything below 620 is generally considered subprime, although Fannie, Freddie and the FHA have guaranteed loans with FICO scores as low as 580.
-- Their new loan does not exceed FHA limits, which range from $271,050 in low-cost areas to $729,750 in high-cost areas, which include most Bay Area counties.
-- Their loan is for a single-family, owner-occupied home.
Borrowers would not have to get an appraisal or document their income to get the new loan. The lender making the new loan would only have to verify that the homeowner has a job. These are the same underwriting requirements under HARP.
There are no debt-to-income limits, so a borrower with a home-equity loan or line of credit could participate as long as the holder of the second mortgage agreed to resubordinate, or put it behind the new FHA loan.
The administration says it will "work with Congress to establish risk-mitigation measures" on deeply underwater loans. For example, it might require the holder of the existing mortgage to reduce principal to 140 percent of the home's value before it could be refinanced into an FHA-backed loan.
The administration said it would put these new loans into a separate pool so it does not impact the FHA's existing mortgage insurance fund, which is already under stress due to high loan defaults.
Separately, the administration says it will ask Congress to make it easier for all homeowners with Fannie- and Freddie-backed loans to refinance by eliminating the need for appraisals and reducing fees.
It also wants Fannie, Freddie or FHA to absorb all closing costs when borrowers who refinance into a lower-rate loan use the savings to accelerate principal reduction rather than reduce their monthly payment. This benefit would be open to everyone who refinances into a Fannie, Freddie or FHA loan, no matter who owns their existing loan.
Keith Gumbinger, a vice president HSH Associates, calls the proposal a "politically savvy stroke - virtually free, hassle-free refinancing for everybody, paid for by someone else."
Given the gridlock in Congress and concerns about the FHA's finances, it's far from certain whether Congress will approve this proposal or anything like it.
Gumbinger says a lot of questions remain, such as what the mortgage insurance premium would be on the new FHA loans. If a plan is approved, it "probably can't be implemented in the market very quickly," he adds.
He also wonders why the administration wants to make it so much cheaper and easier to refinance an underwater loan than to get a mortgage to buy a home. "Isn't it equally or perhaps even more important to help people buy homes and absorb all the inventory driving price down?" he asks.
The Consumer Federation of America applauded the proposal. "Homeowners who have been making their mortgage payments but saw the value of their homes slide because of house price deflation for which they are not responsible should be able to lower their payments," said Barry Zigas, CFA's director of housing policy. "Today's proposal offers a sensible and modest federal helping hand that is long overdue."
But Christopher Thornberg, founding partner of Beacon Economics, asks "whether this is a good idea for the households in question. If you have a middle-class family that doesn't have a lot of assets outside their home, and they are $100,000 underwater, keeping those people in that home is not good social policy."
If you walk away from a home, "you take a hit to your credit score but you get to start fresh. Many people who are deeply underwater should do just this," Thornberg says.
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I'm not sure if I like this plan, especially if this includes those homeowners that a) used remortgaging to live a lavish lifestyle or B) tried using real estate as an investment. It is essentially rewarding these folks for their blunders. But of course, the public will eat this up because of the screw banks and rich people mentality going around and they don't see that they were part of the problem as were the Banks and the Government in this mess. They would cry during the good times at banks that they were not getting loans and now they are crying at the same banks because they are foreclosing on them due to the bad loans and financial decisions that they made.
"Don't be burdened by regrets or make your failures an obsession or become embittered or possessed by ruined hopes"
Quote: I'm not sure if I like this plan, especially if this includes those homeowners that a) used remortgaging to live a lavish lifestyle or B) tried using real estate as an investment.
Definitely agree with this. I'd be more than happy to give aid to those who were sharked into adjustable rate mortgages(ARMS). Sure, they should've read the fine print but the banks should've been realistic about the terms of the ARMS.
Quote: I'm not sure if I like this plan, especially if this includes those homeowners that a) used remortgaging to live a lavish lifestyle or B) tried using real estate as an investment. It is essentially rewarding these folks for their blunders. But of course, the public will eat this up because of the screw banks and rich people mentality going around and they don't see that they were part of the problem as were the Banks and the Government in this mess. They would cry during the good times at banks that they were not getting loans and now they are crying at the same banks because they are foreclosing on them due to the bad loans and financial decisions that they made.
I don't necessarily agree with the program, from the standpoint of they made a choice to purchase knowingly.
And your "A" bulletin is one I agree with, your "B" bulletin I don't see since it clearly states you must live in the home, which kind of negates the investment thing.
One thng I notice is this program doesn't lower what they owe, just allows them to refinance at a lower rate, and helps with the loan fees and such. While it sucks for those of us that have maintained our mortgages, and even more so for those of us that refinanced in the last couple years on our own dime, and it sucks for all those that already lost their home because they couldn't get any assistance like this. Overall it may help reduce foreclosures and assist in the recovery.
The biggest issue I have is they are whether or not reducing rates on people who purchased a hmoe they couldn't afford to begin with is really going to keep them from foreclosure or just push it off another year or so. One would presume that if they adhere to the guidelines that they must have not missed more than 1 payment in the last 12 months, and none in the last 6 that they are able to pay their current mortgage, and this would just give them a little more breathing room.
I think there should also be some sort of pay to mortgage ratio included to ensure that the fees don't get payed by the taxpayers for people who have no trouble making the payments and just want to take advantage of the better rate.
We don't have to agree with each other, to respect each others opinion.
My friend and his wife are in a pickle like this.. No fault of thier own.
They bought a house at what was considered a little below market value in 2005. The market where they live had plunged so far that he now owes more on the home then what he can sell it for.
They've never missed a payment.. aren't in trouble or in danger of losing thier home.
But, if they tried to sell his home now, they'd get clobbered.
They don't need to do anything at this point.
Point is, I'm sure there are plenty of folks in this boat...
For them, it's not a problem unless they needed to or wanted to sell.
now, take that same person, have him lose his job, but gets another job in another state and has to move.
He can't sell his house for even what he owes on it, so, do they walk away from the house? Rent it out? what?
I would hope that these are the types of folks this is meant to help. if it is, I'm for it. If Freddy the freeloader is looking for a quick out,, to hell with him.
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.” Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe." Damanshot
Quote: "Homeowners who have been making their mortgage payments but saw the value of their homes slide because of house price deflation for which they are not responsible should be able to lower their payments,"
Real estate, even your home, is an investment.. the value of investments go up and down, so the fact that an investment went down "through no fault of your own" does not entitle you to recover money or better rates from the government.
As for this plan, I'd have to get into the details.. on the surface I see some things I can get on board with and some that I can't. I do know this for sure, if we are going to get the economy moving in the right direction again with any kind of consistency, the single most important thing that we can do to make that happen in the short term is to stabilize the housing market and if this will do that and not be too terribly expensive, then I could get behind it.
I'm in a similar boat right now, I still make my payments no issues there but the house we bought was a starter home for us. It has 3 bedrooms and 2 full baths that we bought when we had no kids. Fast forward 10 years later and now we have 2 kids and have pretty much outgrown our house.
However because of the housing dip we are at even or underwater on our mortgage. If I sold my house for what I paid for it I would have $27,000 to put down on a new home but my neighbor a few houses down is selling a similar home (same # of bed/baths) for a price that I would only make a few hundred bucks off of. They tried to sell it "By Owner" for a few years now with no success, they finally got a realtor in November so I'm kind of interested on where it will sell at.
Like I said, if we sold it for what we paid we would have $27,000. Our goal all along was for it to be a starter home, pay off as much as we could which was $15-$20 extra a payment but with student loans and other debt that was all we had. Sell it and use the money we made as a down payment on a bigger home later on.
If I wanted to get out I could sell it for even or a slight loss and take a loan from my 401k to use as a down payment on another house but I'm hoping the market comes back at least a little, I'd settle for 10K back on my house right now.
A thank you to the president for doing this. At least from my perspective.
I've lost over $60k equity on what was is now a $180k home. I've had 2 neighbors short sell or foreclose, and those are the only comps in the last 2 years. I currently have about $3k in equity and have been turned down for re-fi due to the low comps and I now don't have enough equity (it doesn't help the appraiser gave me $0 for the $16-18k in upgrades I've made to the house in the last 10 years - hardwood floors, granite countertops, all fixtures, both full and the half bathroom completely remodeled).
Last I looked (a few weeks ago), my credit rating is 790. I have never missed a mortgage payment, and have had no late payments at all of any kind in at least 12 years.
Why should I be penalized for my neighbors not being able to afford their houses?
What I don't like are the following:
Quote: -- They have a minimum FICO score of 580. Anything below 620 is generally considered subprime, although Fannie, Freddie and the FHA have guaranteed loans with FICO scores as low as 580.
Borrowers would not have to get an appraisal or document their income to get the new loan. The lender making the new loan would only have to verify that the homeowner has a job. These are the same underwriting requirements under HARP.
I just looked up the average credit score, and it is 680. Use that as a low boundary, not 580. And while I'm kind of ok without the appraisal, they should have to document their income. At least set a boundary there too - something like you need to have a household income of at least 25% of the value of the loan (in my case, I'd need to make $180x.25 or $45k/year at minimum to qualify).
I don't like us spending MORE money. We don't have it, so we shouldn't spend it.
I do understand at trying to actually help those that got hurt the worst. That is if they didn't already help everyone that either benefited or was hurt the least first
there was an $8K new homeowner plan that cost in the billions that helped get people that were benefiting from the housing market collapse already (they didn't own, so they didn't have any investment collapse beneath them).
then, there was another plan (was it $6K or something else, can't remember specifics) to help those that had been in their home for more than 6 years who were hurt the least (as they had built the equity over time more) costing billions more. This was more understandable as they were hurt, but the cutoff left the people hurt the most out of it.
now, they are going back and taking care of those people too? must be an election year.
-------------------------------
note: AZ is an extreme case, but I bought a home that nearly doubled in value over 2 years. I moved to TX and sold it for 1.2 value (3 years in home) when the market started to fall. That same home is now worth 0.6 of what I bought it at.
I know people there that just refuse to pay their mortgage, short-sale to investors, then rent out their home for as long as it takes to clear their credit with a plan to buy their home back. I don't know how this can be legal (basically people who can afford the mortgage are artificially continuing to keep the housing market down and reaping sometimes upward of $100K in value because their mortgage was that upside down + the months they were mortgage free while the bank went through the short-sale process).
Really, the whole thing from all sides makes me sick (government, banking, and the people doing shady things).
Quote: And your "A" bulletin is one I agree with, your "B" bulletin I don't see since it clearly states you must live in the home, which kind of negates the investment thing.
Remember back before the housing bubble, people were using houses as investments and then moving to larger houses when their housing investments ripened. They would buy a house and when the value increased enough, they would sell and buy a better house with the increased value off of the other one. While others may have bought a house to be a primary residence, others were only using it as a stepping stone to larger and better homes.
"Don't be burdened by regrets or make your failures an obsession or become embittered or possessed by ruined hopes"
Quote: "Homeowners who have been making their mortgage payments but saw the value of their homes slide because of house price deflation for which they are not responsible should be able to lower their payments,"
Real estate, even your home, is an investment.. the value of investments go up and down, so the fact that an investment went down "through no fault of your own" does not entitle you to recover money or better rates from the government.
As for this plan, I'd have to get into the details.. on the surface I see some things I can get on board with and some that I can't. I do know this for sure, if we are going to get the economy moving in the right direction again with any kind of consistency, the single most important thing that we can do to make that happen in the short term is to stabilize the housing market and if this will do that and not be too terribly expensive, then I could get behind it.
Anything you buy really is an investment. A lot of stuff just has horrible returns. A car for instance, though you can offset its loss by the usage you get out of it. Bread, however, is normally a complete loss unless you can find someone who'd give you a dime for a used bag of bread.
But the problem with trying to fix the problem is that it may just need to fix itself, rather than artificially propping it up like our economy was being propped up by the people remortgaging their properties to buy things.
And why do people feel that they are entitled to refinance their homes? These are homeowners who can still afford their payments, unless they took out a bad loan they couldn't afford to begin with hedging on the belief they could just remortgage it in the future when their investment ripened?
Sometimes, we do need to hit rockbottom before things will fix themselves.
"Don't be burdened by regrets or make your failures an obsession or become embittered or possessed by ruined hopes"
I bought my house 5 years ago, and am currently now about $10,000 under water. I am current on my mortgage though .... even with having been off work for the past year and a half.
I think I should get help ...... like maybe just pay my mortgage off, and then pay my taxes, utilities, and maybe put a new car in my garage.
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
Quote: And your "A" bulletin is one I agree with, your "B" bulletin I don't see since it clearly states you must live in the home, which kind of negates the investment thing.
Remember back before the housing bubble, people were using houses as investments and then moving to larger houses when their housing investments ripened. They would buy a house and when the value increased enough, they would sell and buy a better house with the increased value off of the other one. While others may have bought a house to be a primary residence, others were only using it as a stepping stone to larger and better homes.
That's what I think of as planned upgrading. Investing is more like buying beyond your own usage for either flipping for immediate profit, or renting for long term profit.
In your case, either way they are still living in the residence.
I had a buddy doing what you describe, and I laughed when he did it, he had this master plan to get into this nice big house. But it went much slower than he anticipated because any profit he made in the current house, was eaten up by the increase in price in the next house, and then he got stuck mid-way through in an expensive condo he couldn't afford when the market collapsed.
Now he wishes he would have kept his original house with it's low mortgage and quiet neighborhood. Especially now that his 2 boys are in high school and 1 will be heading off to school next year.
We don't have to agree with each other, to respect each others opinion.
here's an interview of ron paul talking about this. He explains what has happened pretty well imo, and talks about this very issue. Seems that the government needs to just get out of the way and let the banks take there lumps. The whole housing market is way over-valued from all the easy credit and the bad decisions of many.
If the government would just get out of the way, and say to the banks, that you are on your own, then maybe they would come back to the very people that are underwater and renegotiate a better deal. As long as the banks expect another bailout they will do nothing.
I agree with that 100% ...... and even disagreed vehemently with the whole "we can't let the banks fail" argument that Bush put forth. I believe that if some banks fail, then others would become stronger by buying up the good assets.
I do believe that the FHA/Fanny/Freddie should have pushed banks more for solutions for these loans rather than allowing banks to start foreclose and collect the insurance while the properties rot. I do think that a mortgage that is paid is better than one that is not ..... and if I was a bank I would try to work out a solution that would get me 100% of something rather than 100% of nothing, and then having to try and sell an underwater property in a down market.
As far as why some people worry about a Paul Presidency, his foreign affairs and military stances worry me a great deal. He seems to think that everyone else will leave us alone if we just leave them alone ....... and that was exactly the same attitude that led to WWII. That's my concern, and that concern overrides all other factors for me.
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
Quote: He seems to think that everyone else will leave us alone if we just leave them alone ....... and that was exactly the same attitude that led to WWII.
Us NOT leaving people alone lead to us being invited into that little conflict .
Quote: 10 years and youre still upside down? It must have taken a huge drop!!!
Not necessarly.. 10 years ago, home prices were pretty inflated.. for all we know, he may have purchased above market at that time and the drop only widened the chasm..
there was probably a time about 3 or 4 years ago that he could ahve dumped out and made some serious cash.. worked for me..
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.” Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe." Damanshot
Quote: Anything you buy really is an investment. A lot of stuff just has horrible returns. A car for instance, though you can offset its loss by the usage you get out of it. Bread, however, is normally a complete loss unless you can find someone who'd give you a dime for a used bag of bread.
Actually by definition, investment means that you expect to receive a return in income or profit above what you put out. Anything that you purchase without the expectation of selling someday to make MORE money than you put in, is an expense. The one most people get wrong is the car, a car is an expense (unless it's a classic that will appreciate or something you plan to fix up and resell) but if you are buying a car for personal use and will eventually trade in or junk, it's not an investment, it's an expense.
The rest of your post I tend to agree with. The problem is that we should have let it hit rock bottom 3 years ago, but we didn't. Instead it was a long, slow, painful slide that dragged this recession out far longer than needed.
Quote: A thank you to the president for doing this. At least from my perspective.
I've lost over $60k equity on what was is now a $180k home. I've had 2 neighbors short sell or foreclose, and those are the only comps in the last 2 years. I currently have about $3k in equity and have been turned down for re-fi due to the low comps and I now don't have enough equity (it doesn't help the appraiser gave me $0 for the $16-18k in upgrades I've made to the house in the last 10 years - hardwood floors, granite countertops, all fixtures, both full and the half bathroom completely remodeled).
Last I looked (a few weeks ago), my credit rating is 790. I have never missed a mortgage payment, and have had no late payments at all of any kind in at least 12 years.
Why should I be penalized for my neighbors not being able to afford their houses?
What I don't like are the following:
Quote: -- They have a minimum FICO score of 580. Anything below 620 is generally considered subprime, although Fannie, Freddie and the FHA have guaranteed loans with FICO scores as low as 580.
Borrowers would not have to get an appraisal or document their income to get the new loan. The lender making the new loan would only have to verify that the homeowner has a job. These are the same underwriting requirements under HARP.
I just looked up the average credit score, and it is 680. Use that as a low boundary, not 580. And while I'm kind of ok without the appraisal, they should have to document their income. At least set a boundary there too - something like you need to have a household income of at least 25% of the value of the loan (in my case, I'd need to make $180x.25 or $45k/year at minimum to qualify).
If you follow the guidelines, FHA loans do have limits on the spending. Most of them are at about 33% of your income for your housing, and up to about 42% including your insurances, expenses (credit cards, outstanding loans, student loans etc). Some are more restrictive. But as a overall, those numbers are there. Enforcement is another issue entirely...There was a time where the banks literally told you what to say when they asked you a question. They don't do that now. And the mortgage market dried up quickly and helped cause this mess. We are digging out of it now.
KeysDawg
The fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. - Carl Sagan
I honestly don't know how anyone can handle 42% of their income going to their home.
When I took out my mortgage, it was less than 20% of my income, and I wasn't sure about spending that.
Now that I am off work on disability, and my income has been slashed, I'm glad that I was as frugal when it came to buying this house as I was. I can handle my payment, even with far less money coming in.
Of course, if the government wants to pay off my mortgage, pay my utilities, and buy me a new car ..... I'll go with that too.
Wait ..... is it Groundhog Day?
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
I'm not upside down at all on my home. The housing market here never really inflated like other places in the country. It stayed fairly even and as such not as many are underwater here.
Sometimes you don't have much of a choice if you live in a high-cost area (like CA). I don't own a house, so I'm no expert, but given the rent out here, I could see a house costing you half your take-home income.
I have a sob story about the housing situation from my girlfriend, but I'll save that for when this thread degrades into a political debate.
There is no level of sucking we haven't seen; in fact, I'm pretty sure we hold the patents on a few levels of sucking NOBODY had seen until the past few years.
Quote: 10 years and youre still upside down? It must have taken a huge drop!!!
That is pretty typical. Ten years ago the market was at the top end of this cycle. Then it slowed for 3-4 years, then started the drop.
The market didn't show strong, or even marginal gains for several years before the bottom fell out, so it's very possible a person buying a home a decade or more ago is underwater, especially in some of the harder hit areas.
You then have to factor in how many foreclosures are in your area. If you have 2-3-4 of those in your area....not 2-3 block neighborhood , say a 10 block area, unless your neighborhood is more or less special and viewed as separate from the surrounding area, you are going to lose value above and beyond. At least until those units are filled and have stable, paying tenants.
If everybody had like minds, we would never learn.
That really sucks. I was fortunate enough to buy a house when I thought the market was at rock bottom in 2010. MY house appraised at 168k, and I bought it for 118 at 4.15% fixed. It's a great neighborhood and the nearest WalMart is 1/2 hour away.
Now...as in the last few years is a great time to buy. Low prices, low interest.
If I was a little younger I would pick up a 3rd house just from an investment standpoint. No way the market drops much further....unless the whole thing unravels at which point we are all holding monopoly money.
If everybody had like minds, we would never learn.
We werent quite ready to buy, but we thought the market wouldnt get any better. We are a little house poor right now, but long term it should work out good.
Quote: I love how we cut defense budget and start sticking it to the troops while at the same time we reward those who have made poor financial decisions.
Unbelievable.
Not everyone that is upside down on thier mortgage are irresponsible..
Some, like the friend I spoke of earlier just had some really bad luck. Ytown for instance is one that really was very smart about it..
but that doens't make my friends losers..
There are real live folks out there that, with no fault on thier own, have found themselves in a pickle over housing.
#GMSTRONG
“Everyone is entitled to his own opinion, but not to his own facts.” Daniel Patrick Moynahan
"Alternative facts hurt us all. Think before you blindly believe." Damanshot
Quote: I love how we cut defense budget and start sticking it to the troops while at the same time we reward those who have made poor financial decisions.
Unbelievable.
Not everyone that is upside down on thier mortgage are irresponsible..
Some, like the friend I spoke of earlier just had some really bad luck. Ytown for instance is one that really was very smart about it..
but that doens't make my friends losers..
There are real live folks out there that, with no fault on thier own, have found themselves in a pickle over housing.
There are real live folks out there that have no fault in this mess and were only buying a house because they wanted and needed to buy a house. Those people are different than the ones out there that were hedging their bets on the false belief that housing prices would always go up and remortgaged and used houses as an investment to move into larger and better houses because they were able to get a larger sum of money to use as a down payment on those larger houses. Of course, they marched forward blindly and ignored the fact that the bubble was about to burst. Even before the bubble burst, I had an argument with a co-worker about this and he called me stupid and crazy for saying that it probably would not be a good time to buy a house, especially as an investment. He kept on claiming that "house prices will always go up, just as they always have done before."
I would have little problem helping out those truly innocent home owners who were just caught in this mess, but a lot of these troubled homeowners are in the mess because they bought houses beyond their means and used these houses to move forward as opposed to just using them as a residence.
"Don't be burdened by regrets or make your failures an obsession or become embittered or possessed by ruined hopes"
Quote: Now...as in the last few years is a great time to buy. Low prices, low interest.
Very much so right now. Rates just hit another historic low, and the easing of the credit market is making this a great season. I know down here I have 8 new buyers in the last two weeks looking for houses. I wrote 4 contracts yesterday for a cash buyer. Seller's are starting to dig in their heels and the market (at least here) has stabilized for the most part. There are still short sales, and there will be for the foreseeable future. But if you're looking to buy, now is as good as any.
Quote: If I was a little younger I would pick up a 3rd house just from an investment standpoint. No way the market drops much further....unless the whole thing unravels at which point we are all holding monopoly money.
The market crash is going to make a lot of people very poor and a lot more very rich. Especially those who have the extra cash laying around and can pick up a few properties to hold for 3-5 years.
KeysDawg
The fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. - Carl Sagan
Gettin ready to try to sell my condo, two in the neighborhood have already sold for my minimum price I would sell for, and my condo has a new ac unit, new furnace, new fridge, new dishwasher, new roof, so I'm hoping to get a little more.
We are looking at a new build, around $135,000, 30 years fixed @3.75%.
If we find a buyer before we list it with a real estate agent (wifes friend) can we hire someone for just the paperwork? I've looked over alot of stuff and it looks pretty confusing.
Yes, you can. Your wife's friend will probably do it for you for a lower rate than a full commission. And that's the smart way to do it. There are a lot of disclosures and legalities that need to be done. And it will more than pay for itself to be able to be sure that there is nothing you missed.
KeysDawg
The fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. - Carl Sagan
Quote: Gettin ready to try to sell my condo, two in the neighborhood have already sold for my minimum price I would sell for, and my condo has a new ac unit, new furnace, new fridge, new dishwasher, new roof, so I'm hoping to get a little more.
We are looking at a new build, around $135,000, 30 years fixed @3.75%.
If we find a buyer before we list it with a real estate agent (wifes friend) can we hire someone for just the paperwork? I've looked over alot of stuff and it looks pretty confusing.
When I purchased my home, we didn't use real estate agents at all. The seller and myself agreed to the terms of the sale, I went to Office Depot and purchased a home contract, we wrote in the exceptions we wanted and both signed it at his kitchen table, had the appraisal and the inspection, fixed what needed to be fixed. We agreed on the closing company and they took it from there.
Without the buyer or seller fees, we kept the price of the house down and both parties were very happy with the end result. There is really nothing to it.
That can be true. But there are legal disclosures that MUST be made by law. Depending on your states laws. Lead based paint, chinese drywall, possible outstanding code violations, open or expired building permits, radon, and others. A lot of them are state and locality specific and can invalidate a sales contract or worse later on if something is not included and it goes to civil court. You may be surprised at how fickle some folks can be and they can come back later and bite ya.
KeysDawg
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