All Encompassing Mortgage and Real Estate Thread

[troph 25,098]

2 hours ago, ZB'Tejas said:

Not doing a remodel on the whole thing so I think that's the price on the rooms he is remodeling and inclusive of a big yard project/pool (so yes missing context). Point being price might end up being 3x what he was originally discussing a year and a half ago.

Not surprising. We are hemorrhaging cash on our build.  There is a corresponding or even a multiple of cost increase equity gain but we don’t want to sell so it’s really not helpful except for borrowing more.  20-30-50-100% across the board. I think we end up 30% higher in the end. But we are lucky we avoided lumber almost entirely. 

[Bookman 4,754]

I have a cute little rental in San Antonio, 2/1, close to Alamo Heights high school. Tenants moved out on Memorial Day, so I spent last week cleaning, etc.

My realtor told me that "with this market you don't even need to clean it."

"Yeah right," I thought.

Anyway, it was listed around 4:00 p.m. Tuesday, and it rented at 11:10 a.m. Wednesday.

I feel like I left some money on the table.

 

Edited June 10, 2021 by Bookman

[Hmbre97 6,337]

They're right. I'm in the rat race right now trying to rent a townhouse/sfh. Looked at one a couple days ago that some out of state investor bought, then turned around and listed it with a mgmt company. They hadn't cleaned shit in it. The refrigerator had shit all spilled in the bottom of it, bathrooms still had old toiletries laying around and were dirty. The whole house needed a repaint on the inside as you could tell the previous owners had beds pushed up against the walls with no headboards and there were giant gray/black grease stains along with other issues. Reality is if my realtor were to ask to have those issues addressed, they'd just move on to another applicant who would do it themselves.

[Assman 1,830]

Can someone explain lumber futures to me like I'm 5?  I get the basic concept of the investment, but how does the price affect the consumer?  We're trying to build a house but we know this is the worst time to build in the history of history.  I've been following the futures for a few months and they've been on a somewhat steady decline for a month now.  But at what point does the consumer see the lower price?  If the futures looks 2 months in advance, will we start seeing the price decrease now or will it be in 2 months?  I've Googled "How do lumber futures work" and it just talks about investing.  I want the consumer's POV.

[CooterBrown 18,273]

Can someone explain lumber futures to me like I'm 5?  I get the basic concept of the investment, but how does the price affect the consumer?  We're trying to build a house but we know this is the worst time to build in the history of history.  I've been following the futures for a few months and they've been on a somewhat steady decline for a month now.  But at what point does the consumer see the lower price?  If the futures looks 2 months in advance, will we start seeing the price decrease now or will it be in 2 months?  I've Googled "How do lumber futures work" and it just talks about investing.  I want the consumer's POV.

Would doing steel studs eliminate a lot of the lumber markup?

[Assman 1,830]

9 minutes ago, CooterBrown said:

Would doing steel studs eliminate a lot of the lumber markup?

Maybe?  But I know nothing about steel and don't even know if my builder is willing to use it.

[jimmyjazz 46,985]

2 hours ago, Assman said:

Can someone explain lumber futures to me like I'm 5?  I get the basic concept of the investment, but how does the price affect the consumer?  We're trying to build a house but we know this is the worst time to build in the history of history.  I've been following the futures for a few months and they've been on a somewhat steady decline for a month now.  But at what point does the consumer see the lower price?  If the futures looks 2 months in advance, will we start seeing the price decrease now or will it be in 2 months?  I've Googled "How do lumber futures work" and it just talks about investing.  I want the consumer's POV.

I'm not sure a futures price reflects anything more than the consensus of where lumber prices will be once that particular instrument matures.  It's a prediction.  It might be way off.  You're basically contracting to purchase X amount of lumber on Y date for Z price, although obviously that contract can be traded as an investment vehicle.

I assume it's used by professionals to hedge?  Futures pricing might give you an idea of where prices might go, but I'm not sure how reliable that is.  Surely (surly) someone here is a trader.

[Neonmoon 38,130]

2 hours ago, Assman said:

Can someone explain lumber futures to me like I'm 5?  I get the basic concept of the investment, but how does the price affect the consumer?  We're trying to build a house but we know this is the worst time to build in the history of history.  I've been following the futures for a few months and they've been on a somewhat steady decline for a month now.  But at what point does the consumer see the lower price?  If the futures looks 2 months in advance, will we start seeing the price decrease now or will it be in 2 months?  I've Googled "How do lumber futures work" and it just talks about investing.  I want the consumer's POV.

As jimmyjazz said, a futures contract is a contract to purchase X amount of lumber on Y date at price Z. Companies use them to hedge against risk of fluctuating prices. (And let’s investors speculate on the prices). If the future prices are lower in 2 months, you will not see the decrease now. The spot price is what lumber can be purchased for today. The futures price is not a guarantee either. It is speculative. Things could happen in the supply and demand of Lumber between now and then that could affect the price of lumber negatively or positively. (Pandemic, forest fire, aliens). 
 

The consumer will see lower prices when there is more supply than there is demand, which will send lumber prices down. The futures price is an educated guess, based on various data points regarding lumber production, building demand, etc. 

Edited June 10, 2021 by Neonmoon

[Guest Lobo]

How do I get an re-appraisal that's remotely reflective of the home sales going on in my immediate area in terms of price/sq. ft.?  I need to get this valuation done for a business purpose of personal finances.  I get that they can usually only use MLS homes, even though almost everything in my neighborhood transacts privately because it goes so quickly and for several hundred thousand above asking.  But for shits 'n giggles, I did a quickie free one through a realtor friend.  I knew it wouldn't be that thorough, but it came in at just slightly above what we paid for it 15 years ago.  Do these people have access to the internet?  I know it's pride of authorship, everybody thinks they're house is worth 10x what they paid for it, but I need a realistic valuation.  Using comps in the immediate 1/2 mile vicinity, we should be at roughly 3x what we paid for it 15 years ago, maybe more.  But the bank came in at about 1.5x and this new dipshit service came in at less than 1.25x.  We've probably done about the medium-level of upgrades for the neighborhood and we have the 4th or 5th largest lot in the HOA.  Fuck, this group came in less than TravisCAD.  I need some realistic picture of this home for financial purposes.  /rant  Thanks.

[UTPhil2006 3,910]

Why did your realtor buddy come in low? Wrong comps? What kind of “appraisal” are they looking for? Like would my comps suffice. You have my email if you wanna answer offline 

[Guest Lobo]

I just need a very current and very objective FMV of the home for a balance sheet submission for underwriting on something unrelated.  I know everybody and their mom thinks their Austin home is worth billions.  My neighborhood is not coming in at $350/ft.  Leander is not coming in at $350/ft.  But that's what this dipshit came back with (not a buddy of mine, just somebody referred to us by a friend I should disclose).  I don't think they even tried.  Anyway, I may turn around and use for it for a HELOC line or something next year (I think I alluded to that with you on another post).  But for now, it's simply a matter of an objective FMV analysis of the home.  Last 7 transactions in 3 months within my HOA and the two adjacent to it went for almost double that per foot, but most were off-MLS.  I guess that's the sticking point.  But there's gotta be a happy medium, no?  

[CHIEF 5,203]

Just cough up the dough and get an appraisal is probably the best solution. That way the appraisal is specifically for your home complete with any remodeling or upgrades.

CHIEF

[Armybrat 41,329]

On 5/20/2021 at 3:08 PM, Armybrat said:

Could someone please advise where I can look to see what the sold price is for this house?

https://www.realtor.com/realestateandhomes-detail/9103-Brimstone-Ln_Austin_TX_78717_M86656-46642

Neighbor was asking $455,000. They just closed for $528,000. 

[Incredulity 11,861]

9 minutes ago, Armybrat said:

Neighbor was asking $455,000. They just closed for $528,000. 

This will end well...

[Armybrat 41,329]

2 minutes ago, Incredulity said:

This will end well...

??

[Sbbruin 22,082]

16 hours ago, Neonmoon said:

As jimmyjazz said, a futures contract is a contract to purchase X amount of lumber on Y date at price Z. Companies use them to hedge against risk of fluctuating prices. (And let’s investors speculate on the prices). If the future prices are lower in 2 months, you will not see the decrease now. The spot price is what lumber can be purchased for today. The futures price is not a guarantee either. It is speculative. Things could happen in the supply and demand of Lumber between now and then that could affect the price of lumber negatively or positively. (Pandemic, forest fire, aliens). 
 

The consumer will see lower prices when there is more supply than there is demand, which will send lumber prices down. The futures price is an educated guess, based on various data points regarding lumber production, building demand, etc. 

The same thing would apply to frozen concentrated orange juice.  

[Incredulity 11,861]

1 minute ago, Armybrat said:

??

Homes being bid up 73K (15%) over asking price.  Classic bubble behavior.  Someone going to end up with a huge bag of shit when the music slows

 

[CBT 1,290]

12 hours ago, Lobo said:

I just need a very current and very objective FMV of the home for a balance sheet submission for underwriting on something unrelated.  I know everybody and their mom thinks their Austin home is worth billions.  My neighborhood is not coming in at $350/ft.  Leander is not coming in at $350/ft.  But that's what this dipshit came back with (not a buddy of mine, just somebody referred to us by a friend I should disclose).  I don't think they even tried.  Anyway, I may turn around and use for it for a HELOC line or something next year (I think I alluded to that with you on another post).  But for now, it's simply a matter of an objective FMV analysis of the home.  Last 7 transactions in 3 months within my HOA and the two adjacent to it went for almost double that per foot, but most were off-MLS.  I guess that's the sticking point.  But there's gotta be a happy medium, no?  

 

4 hours ago, CHIEF said:

Just cough up the dough and get an appraisal is probably the best solution. That way the appraisal is specifically for your home complete with any remodeling or upgrades.

CHIEF

or pay a broker to give you a BOV.

[Guest Lobo]

Yeah that’s what I’m thinking.  But I need it to appear as objective as possible.  I was gonna be okay with this thing prelim referral one but guy came back at almost half of what every single comp in my area prices at.  We are not fully redone or modernized but we are not half of what the other homes have done either.  Any suggestions on who to use in Austin?

[Catpfish 618]

A broker is going to be hamstrung in much of the same way as the appraiser  if public data (MLS comps) isn't available

[Guest Lobo]

I get it.  There's a few available that the previous appraiser was way off on.  And again, this may be pride of ownership talking, but in this day and age in Austin where so many homes are trading off-market...can't that be taken into consideration?  The MLS isn't what it used to be between technical disruption and just the heat of the market necessitating quick cash offers in whisper mode.  I realize they can't track all those that happen off MLS, but once they clear the county---can't those dollar amounts be taken into consideration?  I know it sounds like a greedy asshole, but it's going to sound like fraud it I claim my home is worth $350/foot.  I'll sound like I'm lying for some reason.  No home within 2 miles of me has gone for less than $650 foot in years.  

I guess my question for you experts is how do I find/convince a broker/appraiser that there has to be a better way to do this?  It's the wave of the future.  A home 3 miles from downtown on a half acre in the most wanted school district in Central Texas.  And you've got me at Leander prices because the system says MLS, MLS, MLS.  Home insurance doesn't work that way, the realtor market doesn't work that way, even Travis CAD doesn't work that way.  Or am I just stuck with the current system.  My bank isn't going to accept it.  And the company that is underwriting my personal balance sheet is gonna think I'm full of shit for some reason.  

[MAUFRAIS 6,734]

Homes being bid up 73K (15%) over asking price.  Classic bubble behavior.  Someone going to end up with a huge bag of shit when the music slows
 

And then there’ll be thinkpieces about how this was caused by the cash buyers at the top but then felt by the borrowers in the middle.

[jimmyjazz 46,985]

Sell your home, use the proceeds for your business venture?

I'm only half joking.  I mean, at least at that point you're not dealing with some gulf between reality and MLS.

[Dbeasy 15,528]

On 6/4/2021 at 8:05 AM, HRSchenker said:

Listed my rental in Forney and got an offer $50k above asking price. It cash flows pretty well but the city is going through an anti-growth phase at the worst possible time so I'm worried about the long term future of the location. I might be better off cashing out and looking at other cities who desire long term growth but this market....goddamn lol

what give you the impression Forney is anti-growth? That's interesting and not inline with what I've been hearing.

[CHIEF 5,203]

3 hours ago, Lobo said:

Yeah that’s what I’m thinking.  But I need it to appear as objective as possible.  I was gonna be okay with this thing prelim referral one but guy came back at almost half of what every single comp in my area prices at.  We are not fully redone or modernized but we are not half of what the other homes have done either.  Any suggestions on who to use in Austin?

If you know a mortgage lender, ask them to recommend an appraiser that is best at meeting current housing values, the one that never seems to come up short. Appraisers must only use comps that are less than 6 months old, per TREC. A good appraiser is probably going to use the last 60 days, if there are enough comps in the area to support that period. The appraisers, here, usually pull 4-5 additional comps for their appraisal. Have there been that many home sales close enough to you to provide the comps? I'm sure there is an Austin realtor on here that you could DM your address that could pull all sales within the last 60 days in your market. If I still lived in Austin, I would do it for you.

CHIEF

Edited June 11, 2021 by CHIEF

[jimmyjazz 46,985]

I'm curious -- what is "close enough" for an appraiser?  A mile?  5 miles?  A half mile?

[UTPhil2006 3,910]

We don't have direct contact with the appraisers anymore, but I believe you're in Austin and if I was in Austin I would call up Sammy Pruett - 512-779-4706

[Incredulity 11,861]

2 hours ago, jimmyjazz said:

I'm curious -- what is "close enough" for an appraiser?  A mile?  5 miles?  A half mile?

Same amount that’s “close enough” for a permit inspector(or any other bureaucrat).

[CHIEF 5,203]

2 hours ago, jimmyjazz said:

I'm curious -- what is "close enough" for an appraiser?  A mile?  5 miles?  A half mile?

Same taxing entities, school district, etc. In my neighborhood, it is approximately 3000 homes on 4700 acres, defined by the Brazos River, and country club amenities. Then you have riverfront vs. non-riverfront, on the golf course, not on the golf course, on the airstrip, not on the airstrip. Those are extreme examples, but is Lobo on a high traffic street, or low traffic, corner lot, neighbors behind him? You aren't going to find a comp exactly like his, but it is reasonable to think you can pull five comps that brought more or less money because they had the same desirable or undesirable attributes as his property. An appraiser looking at his specific property will balance those.

CHIEF

[Gil Bang 26,177]

I'm curious -- what is "close enough" for an appraiser?  A mile?  5 miles?  A half mile?

For a unique property, an appraiser can go many miles. For a tract house, and a hot market, he should stay in a small radius. Under 2 miles in my humble opinion

[Hornlover 8,919]

21 hours ago, Lobo said:

I just need a very current and very objective FMV of the home for a balance sheet submission for underwriting on something unrelated.  I know everybody and their mom thinks their Austin home is worth billions.  My neighborhood is not coming in at $350/ft.  Leander is not coming in at $350/ft.  But that's what this dipshit came back with (not a buddy of mine, just somebody referred to us by a friend I should disclose).  I don't think they even tried.  Anyway, I may turn around and use for it for a HELOC line or something next year (I think I alluded to that with you on another post).  But for now, it's simply a matter of an objective FMV analysis of the home.  Last 7 transactions in 3 months within my HOA and the two adjacent to it went for almost double that per foot, but most were off-MLS.  I guess that's the sticking point.  But there's gotta be a happy medium, no?  

No bank is going to give you a HELOC a year from now with an appraisal you ordered yourself.

Almost all bank transactions that require an appraisal - mortgage, refinance, HELOC, etc.  - the bank orders the appraisal, and they have no say in which licensed appraiser actually performs the appraisal (This is to prevent the fraud that went along with mortgage crisis when homes were over-appraising by hand-picked appraisers).

Whatever janky-ass loan you are trying to get that wants you to get order your own appraisal of your home sounds fishy to me. Either have them order the appraisal, or you should just pay some appraiser $100 under the table to get whatever number you want.

[Guest Lobo]

The appraisal I need now is for a business purpose, a portion of a personal statement of net worth for undewriting on a deal.  I was hoping to use it down the road for a HELOC, but your point is well taken.  But as of now, I need one done by somebody appearing very impartial because the one I got already makes it look like I'm trying to lie about the value of my residence since they made it look like I lived in Leander at $350/foot.  

[Hefeweizen 5,416]

Honestly  @Lobo I’m confused.  Because I just had an independent appraisal done for a refi with Thad and it came in at around 600 per square foot in Eanes 78746, and that is midrange.  If you want pm me and I’ll send you the appraisers contact info but he did comps and replacement cost and they were within 100k of each other.  
 

One last plug for Thad and Phil- use these guys because they are honest, reliable, and do exactly what they say they will.  I wouldn’t use anyone else for residential real estate or loans in Austin.

[jimmyjazz 46,985]

WTF is going on here?  Are houses in Leander really pulling $350/sf?  Is "midrange" Eanes really $600/sf?

I could throw a rock and hit Eanes.  If I could get $600/sf I would sell tomorrow and head for the hills.  That would literally be a tripling of my house's value in 5 years.

[Incredulity 11,861]

If you have the flexibility to sell now and ride the lightning, do it.

The current state of affairs is completely unsustainable.

[Guest Lobo]

2 hours ago, Hefeweizen said:

Honestly  @Lobo I’m confused.  Because I just had an independent appraisal done for a refi with Thad and it came in at around 600 per square foot in Eanes 78746, and that is midrange.  If you want pm me and I’ll send you the appraisers contact info but he did comps and replacement cost and they were within 100k of each other.  
 

One last plug for Thad and Phil- use these guys because they are honest, reliable, and do exactly what they say they will.  I wouldn’t use anyone else for residential real estate or loans in Austin.

Will PM you.  All 7 comps on the mLS in the last 3 months have gone at $600-$700/ft. That's where i"m getting my frustration from.  

[Hefeweizen 5,416]

1 hour ago, jimmyjazz said:

WTF is going on here?  Are houses in Leander really pulling $350/sf?  Is "midrange" Eanes really $600/sf?

I could throw a rock and hit Eanes.  If I could get $600/sf I would sell tomorrow and head for the hills.  That would literally be a tripling of my house's value in 5 years.

Depends on your land value.  I have an acre close in so that definitely jacks up the value.  There is a house one street over in the market for 2.65 million, and I saw one sell recently a few streets down for over 600 a foot for an acre lot.  
 

It is kind of wild but I snuck in the area right before the vertical growth in prices started.  Today I’d sell my old house for 850k and couldn’t touch a decent house in Eanes inside 360.

[jimmyjazz 46,985]

40 minutes ago, Hefeweizen said:

Depends on your land value.  I have an acre close in so that definitely jacks up the value.  There is a house one street over in the market for 2.65 million, and I saw one sell recently a few streets down for over 600 a foot for an acre lot.  
 

It is kind of wild but I snuck in the area right before the vertical growth in prices started.  Today I’d sell my old house for 850k and couldn’t touch a decent house in Eanes inside 360.

OK, so larger lots.  I'm at 0.55 acre.  I've been assuming my lot is worth ~ $800K-ish, plus the house.  I'm probably not too far off.

[CHIEF 5,203]

11 hours ago, jimmyjazz said:

WTF is going on here?  Are houses in Leander really pulling $350/sf?  Is "midrange" Eanes really $600/sf?

I could throw a rock and hit Eanes.  If I could get $600/sf I would sell tomorrow and head for the hills.  That would literally be a tripling of my house's value in 5 years.

If you could work from home, this is exactly what I would do. Values in my neighborhood have gone up 50% this year. We are still close enough to DFW, it is a reasonable commute. Homes in BFE (Stephenville for us), not a reasonable commute, have maybe gone up 5-10%. Home values in Austin have, at least, doubled. I bet the other side of Smithville hasn't seen much increase. Probably a different matter going west until you get past Fredricksburg. If you have ever wanted a nice place out in the sticks, now is the time to do it.

CHIEF

[Pato del Muerto 53,343]

10 hours ago, Incredulity said:

If you have the flexibility to sell now and ride the lightning, do it.

The current state of affairs is completely unsustainable.

Yeah all that has to happen is the people pouring into austin needs to stop.  
 

price of lumber stabilizing and lowering would help with new inventory where new inventory is available, but those builders aren’t just going to lower their prices unless the homes don’t sell. 

[CooterBrown 18,273]

Yeah all that has to happen is the people pouring into austin needs to stop.  
 
price of lumber stabilizing and lowering would help with new inventory where new inventory is available, but those builders aren’t just going to lower their prices unless the homes don’t sell. 

Yep. The costs will move to the profit side of the ledger unless the market dictates otherwise. It won’t.

[jimmyjazz 46,985]

1 hour ago, CHIEF said:

If you could work from home, this is exactly what I would do.

I've been working 100% from home since the start of the pandemic.  The other day my CEO told me to make the shift permanently, as I am quite a bit more productive at home.  I basically work 7 days a week these days, but when I have to bookend each M-F with a drive in Austin traffic, it beats me down and I don't really accomplish anything nights or weekends.  Now, if something needs to get done or I get a wild idea, I just retreat to my little office and work.  It's all kinds of liberating.

[CHIEF 5,203]

Getting out of the big city is the best thing I ever did. It has probably put 10 extra years on my life. Never having to deal with traffic, an HEB 15 minutes away, deer and golfers to watch, having a shop to tinker around. The main thing I missed, moving from Austin, was Vietnamese and good Chinese food. But, it has made me incredible at cooking foods that I miss, and a good bowl of Pho is only 45 minutes away.

CHIEF

[Gil Bang 26,177]

2 hours ago, CHIEF said:

Getting out of the big city is the best thing I ever did. It has probably put 10 extra years on my life. Never having to deal with traffic, an HEB 15 minutes away, deer and golfers to watch, having a shop to tinker around. The main thing I missed, moving from Austin, was Vietnamese and good Chinese food. But, it has made me incredible at cooking foods that I miss, and a good bowl of Pho is only 45 minutes away.

CHIEF

So, I've got a client that owns several Thai restaurants in San Diego.

He's actually half Thai, half Chinese.  One day he told me about coming to America from Thailand.   He was 18 years old, and his Uncle was the GM of a very busy Chinese joint in L.A.   

One day, a customer asked to speak to the manager.   Uncle goes to the guys table, and the guy asks him to sit.  Guy is a multi-millionaire from Billings Montana, and loves Chinese food.  Can't get Chinese back home.  Tells the uncle that he's tried every Chinese joint in L.A., and this one is the best.  Says come to Montana and we'll open a restaurant.  I'll put up all the dough and we will be 50/50 partners.   Uncle says sure, and my client comes to America to work in that restaurant in Montana.   He said that the restaurant was a huge success.  

 

/csb

[smwhorn 484]

Looking to sublease approx 2500 sq ft of office space (law firm) either downtown or NW side near 183/620.  

Just now starting to look as several clients have asked us to open an office there.  Any help would be appreciated.

This looks like mostly a residential real estate thread but thought I would start here.

Edited June 13, 2021 by smwhorn

[South Austin 53,157]

1 hour ago, smwhorn said:

Looking to sublease approx 2500 sq ft of office space (law firm) either downtown or NW side near 183/620.  

Very different markets. Downtown rents are ridiculous. Don’t know many law firms that are as far out as 183/620, which is basically Cedar Park.

[TKthunder2 5,058]

5 hours ago, smwhorn said:

Looking to sublease approx 2500 sq ft of office space (law firm) either downtown or NW side near 183/620.  

Just now starting to look as several clients have asked us to open an office there.  Any help would be appreciated.

This looks like mostly a residential real estate thread but thought I would start here.

Downtown is way overpriced, even right now with COVID.  Over at Lake Creek and 183, Q2 just moved out of Aspen Lake 1 now that they’ve got the brand new Aspen Lake 3 building and Tower at the Hills and Tower Point both had some vacancies last time I was looking around.  That area is about to explode with the two new children’s hospitals and Apple’s new campus about to open, so if you could lock up a long term deal now, you’d likely have no problem subleasing if you needed to, assuming we return to preCOVID commercial occupancy.  Just my 2 cents.

[Trey3216 15,450]

On 6/11/2021 at 10:53 AM, Incredulity said:

Homes being bid up 73K (15%) over asking price.  Classic bubble behavior.  Someone going to end up with a huge bag of shit when the music slows

 

https://www.wsj.com/articles/if-you-sell-a-house-these-days-the-buyer-might-be-a-pension-fund-11617544801

[Incredulity 11,861]

26 minutes ago, Trey3216 said:

https://www.wsj.com/articles/if-you-sell-a-house-these-days-the-buyer-might-be-a-pension-fund-11617544801

Too much money chasing too few assets.  Inflation, how does it work?

[Trey3216 15,450]

Just now, Incredulity said:

Too much money chasing too few assets.  Inflation, how does it work?

Yep