<p>artloverplus, in our area, n san diego, we have a similar situation. My S made an offer on a starter detached home, full price offer. He was turned down, there were 39 offers, many over asking, many all cash. Property went pending after 5 days. That’s where we are now. No inventory, investors buying up many properties for cash. The inventory that doesn’t sell is over-priced. If a property doesn’t go pending within 30 days, sellers have to drop their price, by 10% or sometimes more. Our prices have gone up 17% over the last year. The local real estate folks are bullish to say the least, but for buyers it is very tough.</p>
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<p>Exactly, I am one of the Investors :)</p>
<p>Just sold one with cash and turned around bought another, closed today. As I change locks on the door, they came by and ask me if it is for rent or for sale! </p>
<p>Well this one is a really fixer upper, hole in the wall, dead cat in the basement… I had to take it out… so gross and the smell! oh my god! but I am sure I can make some money with it.</p>
<p>JTH,</p>
<p>Your agent should defend you if the roof inspector is partial to the deal. We always use a third party roof inspector. I guess you can also hire a third party roof inspector to counter the buyer’s inspector if the results are not satisfactory, its not very expensive. At the end, its all about money and negotiation.</p>
<p>In CA, we always recommend seller to hire third party inspectors before put the house on the market.</p>
<p>Congrats to all sellers. Re the roof above-</p>
<p>It’s been 5 months since our house sold at the first offer, a low one (we had just moved the week before) after being on the market nearly 2 1/2 years. The buyer (H more vocal than W) kept harping about the 20 year old roof (double layer initially put on by builder)- thought there was hail damage (just me chipping ice from the garage roof before an open house one winter)- no hailstorms but we got our insurance agent to come look at it per seller’s suggestion and say, no damage (the seller had replaced his roof before marketing his house and thought we might do so and be willing if insurance would pay). At the price he paid there was no way I was going to replace a roof, especially since it will be good for several more years. He spent so much time on the roof issue for ten days he ignored any other inspection report issues. Time ran out, he got closer to the closing date and needed to move since his house was sold. No time for him to go to his second choice, redo an inspection… He made the house selling process difficult with his other worries as well. Lucky for us we didn’t have to be at the closing- it was delayed an hour or more because they had the closing on their house contingency and scheduled both for the same time and day!</p>
<p>Glad to be done and the only loose end is the income tax reporting next spring. Net LOSS from cost to build so no money owed by us on the sale. Have to be upbeat and figure we got 20 years out of the house and could sell it and move on.</p>
<p>Both of the places- moved from and to- it was NOT common for the seller to have an inspection when putting the house on the market. Buyer’s responsibility. You can always refuse to replace the roof and contest the inspection results without needing to do any further work/inspection. The buyer then either withdraws the offer, presuming it is a timed contingency, or accepts that they won’t get everything they want at the price they are paying.</p>
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<p>Very depressing thought that I might still be sitting here a year and a half from now.</p>
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<p>I assume you mean per buyer’s suggestion? I hate the way everyone assumes the seller should call the insurance company just to see if they can get a free roof. No wonder our premiums are so high.</p>
<p>But thanks for your story, wis75. We have until Tuesday (I think) and they are sending one more inspector out to look a a potentially damp crawl space area. Haven’t heard more about the roof but I’m sure they’re going to wait and get the bigger picture before ambushing us.</p>
<p>Still back and forth, gap is closing…slowly. Apparently my tax assessment says the square footage is 400 less than two separate mortgage appraisals do. They based their offer on the lower, we sent evidence of the higher along with the last counter.</p>
<p>I will stress inspections next if this works out, because I have a feeling these folks will nickle and dime it. In our area it’s not typical for a seller to do inspections before listing, though I had a list of “to do” items and got them done before listing, they were based on my own observations of what needed to be done.</p>
<p>Sigh. I hate house selling/buying. I can’t imagine doing it for a living.</p>
<p>JustTryHarder, I hope it works out for you. We are at month 7 or almost 8 now. 2.5 years? No way, I’d pull it off the market before that.</p>
<p>ok, just another quick question for you knowledgable folks.</p>
<p>Son’s house buying saga continues. The appraisal came back for $7000 less than the purchase price. Son is putting down 35% to make the mortgage payments affordable on his salary, using some inheritance money in addition to savings for the down payment.</p>
<p>Any advice?</p>
<p>I don’t think the mortgage company is going to care because his down payment is so substantial. But son is not happy and would like to negotiate a price but time is of the essence…he needs to move as lease is up, excellent loan rate may expire…</p>
<p>What should he do in this situation?</p>
<p>^^Isn’t tax assessment usually lower square footage? And don’t know about your area, but in our area the buyer has a 10-day “option period” to inspect and request repairs. I hate this part worse than the earlier counter-offering period since the buyer can pretty much walk away, leaving you with a list of inspection findings that you are now required to fix or disclose. And then it’s back to square one.</p>
<p>Yes, I am hoping this next home purchase will be our last…</p>
<p>OHmom, how far apart are you and the buyers on price?</p>
<p>Appraisals are just one person’s opinion, and there is nothing particularly special about it either.</p>
<p>Especially with the way appraisals are done these days - often the appraiser who gets assigned has no idea of what the area is like or what the market is like. They work only from comps, and often do a very poor job of picking comps because they don’t know the neighborhood. In MA (and probably everywhere) half a mile can make a huge difference, but the appraisers don’t know or care.</p>
<p>And by definition they lag the market by some number of months.</p>
<p>Plus they are under pressure to come in low, as banks have gotten so paranoid.</p>
<p>If you all think the purchase price is fair based on what you have seen and your knowledge of the market in that area, then I wouldn’t worry about it. Appraisers don’t have access to any information not publicly available, so their opinion is no better than yours.</p>
<p>With your son putting so much down it is a non-issue as far as the bank is concerned.</p>
<p>I think if you go back looking to redo the deal because of an appraisal, there is a high chance of the whole deal blowing up. Since the bank will finance it anyway, unless you have an appraisal contingency in the P+S it’s not clear your S has any leverage.</p>
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<p>It’s usually a lower value than the market value, but the sq footage comes from the appraiser walking around the house measuring. We had two done 4 years apart and they’re within 30 sq feet of each other.</p>
<p>We have about 5% of asking between their last offer and my last counter. Ball is in their court now and they’ve indicated they will come back with a “final”. They are investors (presumably will rent it) so are looking harder at sq footage than a family planning to move in would.</p>
<p>The inspection part sucks, I hate it. This is a 100+ year old house and they looked hard when they looked themselves, but you never know what issues they’ll deem negotiation-worthy.</p>
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<p>I recently purchased a house and had thought about doing the same thing, but felt having the extra 15% over the 20% down payment was really useful. A large part of it is still invested, and some is going towards doing upgrades to the house. With interest rates so darned low it’s hard to say it’s necessarily better to put as much as possible into a down payment.</p>
<p>And in this economy, having money in the bank, even if it’s not earning much, is a good idea.</p>
<p>Here is my take on the down payment on a house. Right now, if you have cash on hand, unless you know how to invest, it is hard to get 3+% on the money that you pay on the mortgage. The low risk investment options are all paying less than 1% on the money. I would pay the highest % of down payment so you can get the lowest mortgage rate. Once I have the house, I will start a HELoC, so if I need the money I can write a check, I get the exact amount I need when I wanted and I pay the interest on the money I use. I don’t have to hoard all the cash in the bank and get nothing for my money.</p>
<p>Generally, I agree with you guys as far as keeping the money in the bank. But right now my son and DIL are in an unusual position…</p>
<p>He has a good job, and they have money in the bank (they are frugal savers, and also he received an inheritance several years ago that has grown over the years). DIL is pregnant, they live in a 4.5 story walk up in Cambridge…and DIL will be receiving her MBA from MIT/Sloan this spring.</p>
<p>They figured they would never be able to buy at a time when they could get in when both prices and interest rates are both so low. So, especially with the baby coming in March, this makes sense.</p>
<p>Their plan is to refinance in the next year or two, once DIL is established in her career (hopefully!), or at that time, to move to an even better house. They are very lucky…</p>
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<p>The state of economy is in cycles, it goes up and it goes down, we have been in a down cycle for over 4 years, while no one can tell if the economy is going up the next year or not but it will turn. From local business point of view(the SF Bay Area), it is bottomed out and has an upswing trend.</p>
<p>Considering that some banks closed off their HELOCs to homeowners a few years ago, I would not want my liquidity tied up in the house. As it is, we are in the process of refinancing and after six weeks we STILL do not have a processor. They have guaranteed our sub-3% rate, but the reality is that the bathroom can’t be repaired/renovated til the refi comes through. We have to save our true liquidity and our HELOC for tuition payments. </p>
<p>Call me risk averse. Everyone else does! 
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<p>boysx3 – your son and DIL are in a great position. We didn’t buy a house til we’d been married 14 years. Paying off student loans, having two kids, losing my income when they were small, later followed by day care expenses, made it hard to accumulate funds for the down payment!</p>
<p>Florida’s housing market is getting a little better, but it is far from being a hot market. There are isolated house inventory shortages in scattered corners of Florida, but many distressed properties (foreclosures and short sales) are still in the pipeline throughout Florida holding house prices down. Banks are still foreclosing on tons of homes in Florida and dumping them on market which ‘traditional’ homesellers have to compete with when selling. </p>
<p>[Several</a> Top Economists Agree Florida’s Housing Market Growing Stronger - WORLD PROPERTY CHANNEL Global News Center](<a href=“http://www.worldpropertychannel.com/north-america-residential-news/florida-housing-market-dr-john-tuccillo-florida-realtors-doug-duncan-fannie-mae-leslie-appleton-young-california-association-of-realtors-housing-recovery-report-6361.php]Several”>http://www.worldpropertychannel.com/north-america-residential-news/florida-housing-market-dr-john-tuccillo-florida-realtors-doug-duncan-fannie-mae-leslie-appleton-young-california-association-of-realtors-housing-recovery-report-6361.php)</p>
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True, but not to all HELOCs. Banks fail and house market crash, banks have to protect themselves by closing off those weakest borrowers. Right now, the housing market has more or less bottomed out to the extend of about 50% from the high and if you have enough equity, the HELOCs are mostly safe.</p>
<p>In addition, today’s Helocs are not the same as in the pre-crash Helocs. In the past, if you have equity in the house, you will get the Helocs, your income strings are less important. Now a days, Helocs are looked upon just like a mortgage, you need to have substantiated income to pay for those potential loans before the bank will approve the Line. So, the potential of the Line being pulled are much less.</p>
<p>Regarding the son and an appraisal lower than his offer. The mortgage company may not allow the loan- just in case they get stuck with the house. The sellers likely would not get any more than the appraised value from someone else so your son should be able to get it for that value.</p>