All Encompassing Mortgage and Real Estate Thread

[Gil Bang 25960]

8 minutes ago, Wulaw Horn said:

It wasn’t ever to the agents here. Check directly to seller so nobody had to mess with it as an accounting matter. 

And who gave it to the seller?  

I assume buyer gives to his agent, who passes it to listing agent, who passes it to seller?

[Dbeasy 15052]

The old way sucked. Sending it to the title company is glorious. 

[CHIEF 5091]

1 hour ago, Wulaw Horn said:

Check made out to the title company and everything?  

Option check made out to the seller. It just gets receipted by the Title Company now. I'm with Dbeasy, it is glorious. You no longer have to try to meet up with the buyer or buyer agent at a specific time and place. Just drop everything off at the Title company.

CHIEF

[Wulaw Horn 19073]

57 minutes ago, Gil Bang said:

And who gave it to the seller?  

I assume buyer gives to his agent, who passes it to listing agent, who passes it to seller?

Yep. Sometimes delivered to title where it sits on their desk until someone else comes and picks it up. But never deposited into a title escrow account. 

[Wulaw Horn 19073]

22 minutes ago, Dbeasy said:

The old way sucked. Sending it to the title company is glorious. 

I could see your side of that for sure. 

[Ojo Rojo 1965]

4 hours ago, Hmbre97 said:

Since this site is full of lawyers, anyone practice/familiar with estate probate in Texas where property is concerned? My step-dad is too cheap to pay for a consult and it sounds like whoever is driving the bus is doing it wrong. I would like to see if my thinking is correct and let him know he needs to retain someone, else lose out on money owed.

I am.  What's the question?

[Ojo Rojo 1965]

I need dumb question amnesty on a real estate question or two.

The situation is that we own some property on the coast and we're looking to sell.  We have a couple of interested buyers coming in with cash so we may not involve a realtor.  The problem is that we don't know what to ask for the property. I mean, we have an idea based on what information we can get, but I'm not that confident. We can look at Zillow and other sites for listings online, but listings aren't comps.  I've found a few on Trulia where the homes actually sold and I can see what was paid, but there are very few and no comps.  So first question is - where can I go to see prices of homes actually sold in an area?  Second question is:  We asked a relative who has access to MLS to look up some comps for us, but she couldn't see homes sold in this particular area.  I thought MLS was nationwide, no?  Do you pay for a subscription to just a certain area, or what? 

[Hmbre97 6308]

I'll just post it here instead of PM's in case anyone else wants to weigh in.

Property is 2ish acres in Liberty Hill with a tear down on it. Prob worth 150k-200k so not an overly large sum of money.

The property was owned by my stepfathers father and his wife (no relation to stepfather; remarried). Some years back, they quit paying the property taxes because they were olds living on SS. Since Texas won't come after seniors in arrears on property taxes, they've been building up. IIRC, it's up to 35k now. 

His father died a couple of years ago with no will so his part of the deed changed to Estate of XXXXX. At the time, there were 5 living siblings. The wife continued to live there until last December when she passed away. She has one daughter and a will was left. The daughter changed her half of the property interest to her name. Now the property deed says "Daughters Name/Estate of XXXXXX". 

Question 1: On the estate side, there were 5 siblings. One has since passed away having no will either. No one can give a straight answer to where his piece of the pie would fall. Is it his surviving spouse? His kids?

Question 2: Let's say the property sells for $200k and there are 40k in taxes owed. My assumption is that since one party holds 50% ownership, they also own 50% of the tax debt. Then the other 5 parties that own the other 50% would split the owed amount between them. However, whoever is processing this is saying it instead will be split 6 equal ways. That seems incorrect to me and in the end, probably isn't a big difference $$$ wise but there are bitter family disputes going on over this stuff right now so there is a big sense of no one wants anyone else to get more than what they're legally entitled to.

[Dbeasy 15052]

16 minutes ago, Ojo Rojo said:

I need dumb question amnesty on a real estate question or two.

The situation is that we own some property on the coast and we're looking to sell.  We have a couple of interested buyers coming in with cash so we may not involve a realtor.  The problem is that we don't know what to ask for the property. I mean, we have an idea based on what information we can get, but I'm not that confident. We can look at Zillow and other sites for listings online, but listings aren't comps.  I've found a few on Trulia where the homes actually sold and I can see what was paid, but there are very few and no comps.  So first question is - where can I go to see prices of homes actually sold in an area?  Second question is:  We asked a relative who has access to MLS to look up some comps for us, but she couldn't see homes sold in this particular area.  I thought MLS was nationwide, no?  Do you pay for a subscription to just a certain area, or what? 

Mls is localized to each market in Texas, different one for Austin, Houston, etc.  You mentioned land, and it is difficult to get land comps sometimes. As for home comps, with some work an agent could triangulate on a decent price and back out the land value. You need to find an agent in that market who has access to that mls. 

[Gil Bang 25960]

14 minutes ago, Ojo Rojo said:

I need dumb question amnesty on a real estate question or two.

The situation is that we own some property on the coast and we're looking to sell.  We have a couple of interested buyers coming in with cash so we may not involve a realtor.  The problem is that we don't know what to ask for the property. I mean, we have an idea based on what information we can get, but I'm not that confident. We can look at Zillow and other sites for listings online, but listings aren't comps.  I've found a few on Trulia where the homes actually sold and I can see what was paid, but there are very few and no comps.  So first question is - where can I go to see prices of homes actually sold in an area?  Second question is:  We asked a relative who has access to MLS to look up some comps for us, but she couldn't see homes sold in this particular area.  I thought MLS was nationwide, no?  Do you pay for a subscription to just a certain area, or what? 

MLS is most certainly not nationwide.  I belong to CRMLS, and we are the biggest in the country, and we don't even cover all of California.

If you're trying to save commission, I'd get an appraisal.  Or, call a local broker and tell him you're thinking about selling and ask for a Market Analysis.  Pay him 50 bucks or so.

[Pato del Muerto 52507]

34 minutes ago, Ojo Rojo said:

I need dumb question amnesty on a real estate question or two.

The situation is that we own some property on the coast and we're looking to sell.  We have a couple of interested buyers coming in with cash so we may not involve a realtor.  The problem is that we don't know what to ask for the property. I mean, we have an idea based on what information we can get, but I'm not that confident. We can look at Zillow and other sites for listings online, but listings aren't comps.  I've found a few on Trulia where the homes actually sold and I can see what was paid, but there are very few and no comps.  So first question is - where can I go to see prices of homes actually sold in an area?  Second question is:  We asked a relative who has access to MLS to look up some comps for us, but she couldn't see homes sold in this particular area.  I thought MLS was nationwide, no?  Do you pay for a subscription to just a certain area, or what? 

The shady thing to do would be call a realtor and say you are thinking of selling, and ask for a market analysis. Then when you meet and they go over everything, don’t sign. 
 

and that’s only shady because you know going in that you are not going to sign, so it’s bad faith.  The act of telling a realtor no thanks after they provide an analysis is no big deal. 

Edited September 1, 2021 by Pato del Muerto

[Gil Bang 25960]

1 hour ago, Ojo Rojo said:

I need dumb question amnesty on a real estate question or two.

The situation is that we own some property on the coast and we're looking to sell.  We have a couple of interested buyers coming in with cash so we may not involve a realtor.  The problem is that we don't know what to ask for the property. I mean, we have an idea based on what information we can get, but I'm not that confident. We can look at Zillow and other sites for listings online, but listings aren't comps.  I've found a few on Trulia where the homes actually sold and I can see what was paid, but there are very few and no comps.  So first question is - where can I go to see prices of homes actually sold in an area?  Second question is:  We asked a relative who has access to MLS to look up some comps for us, but she couldn't see homes sold in this particular area.  I thought MLS was nationwide, no?  Do you pay for a subscription to just a certain area, or what? 

full disclosure in case you don't know:  I'm a realtor.

Also, I read you post as "the property" is a house, somebody else thinks land.  Which is it?   Houses are usually easier to value than raw dirt. 

Where are these "interested buyers" coming from?   It's likely that they are bottom feeders throwing offers out to multiple landowners to see if anybody bites.  

The best way to get maximum value from the sale is to expose the property to as many buyers as possible.  Which means listing it on the MLS, which puts it on zillow, etc.   

Also, the buyers "coming in with cash" has dick to do with the decision to list or not to list.  Many, if not most, land buyers are cash. 

Edited September 2, 2021 by Gil Bang

[Ojo Rojo 1965]

56 minutes ago, Dbeasy said:

Mls is localized to each market in Texas, different one for Austin, Houston, etc.  You mentioned land, and it is difficult to get land comps sometimes. As for home comps, with some work an agent could triangulate on a decent price and back out the land value. You need to find an agent in that market who has access to that mls. 

It's a house on a lot and a half.

41 minutes ago, Pato del Muerto said:

The shady thing to do would be call a realtor and say you are thinking of selling, and ask for a market analysis. Then when you meet and they go over everything, don’t sign. 
 

and that’s only shady because you know going in that you are not going to sign, so it’s bad faith.  The act of telling a realtor no thanks after they provide an analysis is no big deal. 

Yeah, I thought about this.  Two problems:  I have a conscience and I try not to be an asshole and I have several relatives who are realtors in the area so I'm obligated to use them. Except I can't screw my relatives (this ain't Oklahoma), I hate asking for favors and I just generally want to keep them out of it for now.

1 minute ago, Gil Bang said:

full disclosure in case you don't know:  I'm a realtor.

Where are these "interested buyers" coming from?   It's likely that they are bottom feeders throwing offers out to multiple landowners to see if anybody bites.  

The best way to get maximum value from the sale is to expose the property to as many buyers as possible.  Which means listing it on the MLS, which puts it on zillow, etc.   

The buyers are actually people we know. Word got out a little that we were interested in selling soon and that's how they came to us. One is a friend of a friend kind of deal and the other is an adjacent property owner who has expressed interest in the past.

[Gil Bang 25960]

2 minutes ago, Ojo Rojo said:

It's a house on a lot and a half.

Yeah, I thought about this.  Two problems:  I have a conscience and I try not to be an asshole and I have several relatives who are realtors in the area so I'm obligated to use them. Except I can't screw my relatives (this ain't Oklahoma), I hate asking for favors and I just generally want to keep them out of it for now.

The buyers are actually people we know. Word got out a little that we were interested in selling soon and that's how they came to us. One is a friend of a friend kind of deal and the other is an adjacent property owner who has expressed interest in the past.

That all makes 100% sense. 

Whether you list or not, expect some friction from the family once they find out that you've sold.    

I think I can maybe help you.  If you want to PM me the particulars, I can call a local agent down your way, and ask for comps as a courtesy, promising nothing except that I will return the favor for him and any of his office mates anytime that I can.  And like I mentioned upthread, I swing a big dick when it comes to comps due to the size of my MLS. 

[Gil Bang 25960]

I just thought of a "Plan B".  

Check realtor.com and use the agent search function for your area.  Check the agent bios.  Find one that mentions "Fightin' Texas Aggie Class of" whatever.  Call him, tell him you didn't go to college, but you went to a game at Kyle once and everybody said howdy, was classy, etc, unlike the experience you had in Austin.   At that point he'll do anything for you for free. 

Bonus points if you talk about how the Fightin' Texas Aggie Band won halftime.

Edited September 2, 2021 by Gil Bang

[Ojo Rojo 1965]

1 hour ago, Hmbre97 said:

I'll just post it here instead of PM's in case anyone else wants to weigh in.

Property is 2ish acres in Liberty Hill with a tear down on it. Prob worth 150k-200k so not an overly large sum of money.

The property was owned by my stepfathers father and his wife (no relation to stepfather; remarried). Some years back, they quit paying the property taxes because they were olds living on SS. Since Texas won't come after seniors in arrears on property taxes, they've been building up. IIRC, it's up to 35k now. 

His father died a couple of years ago with no will so his part of the deed changed to Estate of XXXXX. At the time, there were 5 living siblings. The wife continued to live there until last December when she passed away. She has one daughter and a will was left. The daughter changed her half of the property interest to her name. Now the property deed says "Daughters Name/Estate of XXXXXX". 

Question 1: On the estate side, there were 5 siblings. One has since passed away having no will either. No one can give a straight answer to where his piece of the pie would fall. Is it his surviving spouse? His kids?

Question 2: Let's say the property sells for $200k and there are 40k in taxes owed. My assumption is that since one party holds 50% ownership, they also own 50% of the tax debt. Then the other 5 parties that own the other 50% would split the owed amount between them. However, whoever is processing this is saying it instead will be split 6 equal ways. That seems incorrect to me and in the end, probably isn't a big difference $$$ wise but there are bitter family disputes going on over this stuff right now so there is a big sense of no one wants anyone else to get more than what they're legally entitled to.

I'm confused by the people involved and their relation.  The original two people who owned the property were your stepfather's father (your step-grandfather then?  Is that a thing?) and your stepfather's father's wife, right?  (She would be like your step-grandmother?)  So the wife is not your stepfather's mother?  She was married to your stepfather's father, right?  So, stepfather's father had five kids from a previous marriage? And his wife had one daughter from a previous marriage, right?

I also don't have enough info to give you a complete answer.  Did they buy this property while they were married?  Did one or the other own it prior to marriage?  Did they have a mortgage on it that they paid during marriage? It matters if the property is community or separate property since he had no will.

On your first question, did the sibling who passed have a will or no?

On Question 2, each owner is responsible for their proportionate share of the property taxes. So the daughter of the wife would owe the taxes due on her 50%; the other five interests would each owe 20% of the taxes on their 50% of the property.

If you are within four years then you can file for an estate administration for him. That would settle who gets what from his estate. It sounds like the daughter probated the mom's will already if she was able to get a deed in her name.  Or, you can do an affidavit of heirship, which is a helluva lot cheaper and faster.  It also sounds like they need a family settlement agreement between all six of them to agree on how the property taxes will be paid. Ideally the property would be sold, the taxes would be paid from the proceeds (which might happen automatically if the taxing authority already has a judgment and an unexpired abstract on file) and the remainder distributed 50% to her and 1/5 each from the other 50% to the other siblings and the heirs or beneficiaries of the deceased sibling.

If you want to PM me with other details out of the public eye I'm happy to answer questions.

[Ojo Rojo 1965]

31 minutes ago, Gil Bang said:

That all makes 100% sense. 

Whether you list or not, expect some friction from the family once they find out that you've sold.    

I think I can maybe help you.  If you want to PM me the particulars, I can call a local agent down your way, and ask for comps as a courtesy, promising nothing except that I will return the favor for him and any of his office mates anytime that I can.  And like I mentioned upthread, I swing a big dick when it comes to comps due to the size of my MLS. 

Thanks.  I might take you up on it. We're a little more progressed than I let on originally.  With one of the potential buyers we've already given him a price and we're waiting for him to go look at the property and get back to us. That price was based on the (mostly bad) information we could actually see.  If that falls through then I will probably want to get more scientific about our asking price with the second potential buyer.

[hornian 5219]

5 hours ago, UTPhil2006 said:

Goes to title now as I’ve been informed. 

 

4 hours ago, UTPhil2006 said:

It’s a relatively new thing. 

 

4 hours ago, CHIEF said:

Yep. Been doing it for only about a month or two.

CHIEF

Weird. I liked it when it moved from checks to Venmo. That was the best. 

[Hmbre97 6308]

25 minutes ago, Ojo Rojo said:

I'm confused by the people involved and their relation.  The original two people who owned the property were your stepfather's father (your step-grandfather then?  Is that a thing?) and your stepfather's father's wife, right?  (She would be like your step-grandmother?)  So the wife is not your stepfather's mother?  She was married to your stepfather's father, right?  So, stepfather's father had five kids from a previous marriage? And his wife had one daughter from a previous marriage, right?

Yep, you have it all correct. All kids were from previous marriages.

25 minutes ago, Ojo Rojo said:

I also don't have enough info to give you a complete answer.  Did they buy this property while they were married?  Did one or the other own it prior to marriage?  Did they have a mortgage on it that they paid during marriage? It matters if the property is community or separate property since he had no will.

It is community property. They bought the land after they got married and built the house on it.

 

25 minutes ago, Ojo Rojo said:

On your first question, did the sibling who passed have a will or no?

No

25 minutes ago, Ojo Rojo said:

On Question 2, each owner is responsible for their proportionate share of the property taxes. So the daughter of the wife would owe the taxes due on her 50%; the other five interests would each owe 20% of the taxes on their 50% of the property.

If you are within four years then you can file for an estate administration for him. That would settle who gets what from his estate. It sounds like the daughter probated the mom's will already if she was able to get a deed in her name.  Or, you can do an affidavit of heirship, which is a helluva lot cheaper and faster.  It also sounds like they need a family settlement agreement between all six of them to agree on how the property taxes will be paid. Ideally the property would be sold, the taxes would be paid from the proceeds (which might happen automatically if the taxing authority already has a judgment and an unexpired abstract on file) and the remainder distributed 50% to her and 1/5 each from the other 50% to the other siblings and the heirs or beneficiaries of the deceased sibling.

If you want to PM me with other details out of the public eye I'm happy to answer questions.

Yeah, this whole process is being rushed now because from what I've been told, the county wants to step in and sell it to pay off the taxes owed so now they're trying to sell it themselves to maximize profit. From what I gather, the daughter did probate the mothers will, hence the deed change. The siblings on the other side are all now getting affidavits of heirship. 

 

So filing for the estate admininstration, would all parties with an interest in the estate have to sign off on doing this? And are the costs of doing this automatically deducted from the proceeds? Anything that involves cooperation is going to be a struggle.

 

And thanks again for taking the time to provide some insight on this. 

Edited September 2, 2021 by Hmbre97

[TKthunder2 4992]

1 hour ago, hornian said:

 

 

Weird. I liked it when it moved from checks to Venmo. That was the best. 

Did I Venmo you the option money?  I can’t remember…but yeah it was way easier than meeting up a HEB parking lot to get/give a check.

[Pato del Muerto 52507]

I probably signed my contract in June, and the title company asked for option and earnest. I sent it over as one wire. 

[hornian 5219]

39 minutes ago, TKthunder2 said:

Did I Venmo you the option money?  I can’t remember…but yeah it was way easier than meeting up a HEB parking lot to get/give a check.

Pretty sure you did. And I know I did it with my house that I bought and the other house I sold last year. 

[UTPhil2006 3807]

A lot of title company's use ZOCCAM now so that you can do everything from the seat of your pants

[Ojo Rojo 1965]

13 hours ago, Hmbre97 said:

Yep, you have it all correct. All kids were from previous marriages.

It is community property. They bought the land after they got married and built the house on it.

 

No

Yeah, this whole process is being rushed now because from what I've been told, the county wants to step in and sell it to pay off the taxes owed so now they're trying to sell it themselves to maximize profit. From what I gather, the daughter did probate the mothers will, hence the deed change. The siblings on the other side are all now getting affidavits of heirship. 

 

So filing for the estate admininstration, would all parties with an interest in the estate have to sign off on doing this? And are the costs of doing this automatically deducted from the proceeds? Anything that involves cooperation is going to be a struggle.

Okay, where you have community property and kids outside of the marriage that existed on the date of death, 1/2 goes to the surviving spouse and half goes to the kids of the decedent.  So her daughter should own 50% and his five kids own the other half in undivided interests.  That is also how the property tax debt should be split:  1/2 to her daughter and 1/5 each to his five kids.

The deceased sibling's share will pass to that person's heirs.  It will be separate property though, if they were even married, since it was inherited. The property would go to the deceased siblings children equally, if any, with the surviving spouse, if any, having a life estate in 1/3.

If the daughter got a deed after probate then her interest is secure.  The affidavits of heirship should work for the others, including the deceased sibling's heirs, provided the title company and the lender involved in the sale will accept them.  An affidavit of heirship is the least reliable form of conveyance of decedent's real property, so sometimes lenders and title companies won't accept them.  But it's really going to be up to them.  I would avoid the estate administration route unless you are required to in order to sell the land.  Even then it might take too long to get an administrator appointed before the county forecloses on their tax lien. If that was going to happen then I would pony up the cash to pay the taxes and get reimbursed later when the property sells.  I would avoid the county's foreclosure sale at all costs.

To answer your question, though, in the event you do have to get an estate administration (you would have to have two in this case - one for the stepfather's father and one for his deceased child's interest), then you do have to get consents from all of the heirs for an independent administration.  Costs of administration are born by the estate, so any money in the estate, including proceeds from the sale of real property, would be used to cover the costs, which will be mostly the attorney's fees.  Some attorneys will require a retainer up front, so someone might have to come out of pocket for that.  I typically would not in a probate or estate administration because the estate is going to have money enough to cover my fees and I didn't want to make an executor or administrator come out of pocket for that before they got access to estate funds.

[blacklab 11939]

2 hours ago, Ojo Rojo said:

That is also how the property tax debt should be split:  1/2 to her daughter and 1/5 each to his five kids.

So they should pay 1/2 + (1/5 *5) = 1.5 the tax they owe?

The other 5 should be 1/10

[Wulaw Horn 19073]

9 minutes ago, blacklab said:

So they should pay 1/2 + (1/5 *5) = 1.5 the tax they owe?

The other 5 should be 1/10

Yep. 

[Ojo Rojo 1965]

1 hour ago, blacklab said:

So they should pay 1/2 + (1/5 *5) = 1.5 the tax they owe?

The other 5 should be 1/10

Right.  I meant 1/5 of their 50% interest, which is equal to 1/10 of the total taxes owed on the property.

[troph 24810]

Dah fuq ? Walked into a law school exam.  
 

[Gil Bang 25960]

6 hours ago, troph said:

Dah fuq ? Walked into a law school exam.  
 

Reminded me of the scene in "...Mad Mad World" where they're trying to figure out how to divide the treasure. 

[HRSchenker 2268]

On 9/2/2021 at 12:33 PM, blacklab said:

So they should pay 1/2 + (1/5 *5) = 1.5 the tax they owe?

The other 5 should be 1/10

[Hornlover 8830]

In case any of y'all come here primarily for the news, and not the football.

[Gil Bang 25960]

Hmmm.  

 

 

[CooterBrown 18014]

The deal was closed in the sex tent. No one else had a chance.

[Gil Bang 25960]

So I'm working with a buyer that's a PITA.

She's 740 Credit, good income and low debt.  Wants to buy a condo in the $400,000 range.  Putting about 150 down.  My usual guy quoted 2.875 for 30 year fixed.  Buyer blew a fuse...that's "way too high", etc.  I told her to call whoever she wants, just get pre-qualified.

Rate seemed pretty good to me.  Thoughts? 

[UTPhil2006 3807]

43 minutes ago, Gil Bang said:

So I'm working with a buyer that's a PITA.

She's 740 Credit, good income and low debt.  Wants to buy a condo in the $400,000 range.  Putting about 150 down.  My usual guy quoted 2.875 for 30 year fixed.  Buyer blew a fuse...that's "way too high", etc.  I told her to call whoever she wants, just get pre-qualified.

Rate seemed pretty good to me.  Thoughts? 

Unless she thinks that’s a 15 year rate yeah that’s pretty solid. 

[Incredulity 11675]

1 hour ago, Gil Bang said:

So I'm working with a buyer that's a PITA.

[Wulaw Horn 19073]

1 hour ago, Gil Bang said:

So I'm working with a buyer that's a PITA.

She's 740 Credit, good income and low debt.  Wants to buy a condo in the $400,000 range.  Putting about 150 down.  My usual guy quoted 2.875 for 30 year fixed.  Buyer blew a fuse...that's "way too high", etc.  I told her to call whoever she wants, just get pre-qualified.

Rate seemed pretty good to me.  Thoughts? 

On a condo?  With a $250k loan?  Yeah- your guy should still be your guy with that quote man.  

[Gil Bang 25960]

5 minutes ago, Wulaw Horn said:

On a condo?  With a $250k loan?  Yeah- your guy should still be your guy with that quote man.  

Yeah...here's the honest, unvarnished truth. He's "my guy" because he's easy to work with, responsive, and communicates well.  All of that makes my job easier.  Of course, I want the best for my clients, but, even if I find out somebody else is a little cheaper, I'm still gonna steer my buyers his way.  

[Wulaw Horn 19073]

5 minutes ago, Gil Bang said:

Yeah...here's the honest, unvarnished truth. He's "my guy" because he's easy to work with, responsive, and communicates well.  All of that makes my job easier.  Of course, I want the best for my clients, but, even if I find out somebody else is a little cheaper, I'm still gonna steer my buyers his way.  

Sure.  All the market research says 3 things agents care about (this is like 96% of the agents top 3)

1) follow up with my leads quickly

2) Communicate throughout the process

3) Close on time.

Nothing else is really close. I guess I just meant to say- yeah- your guy is in the right ballpark and not making you look bad to any reasonable buyer you refer with that pricing. IF the pricing was too bad that might reflect poorly on you. This doesn't.  Problem is with buyer not lender.  

[Gil Bang 25960]

Yep

[jimmyjazz 45963]

Can we talk about Appraising the Value of a Home 101?  Focus on Austin.  Ground rules:  "ask a realtor for a CMA" is off limits as an answer. 

I am specifically trying to learn how one might assess what goes into the closing price on a single family house, which of course varies by location (among other things).  At the highest level, it seems like $/sf is a pretty poor predictor of value, because it ignores land value.  That said, splitting a closing price into "house value" and "land value" is tricky -- one equation, two unknowns.

Toward that end, I have gotten closing prices on "tear downs" in my area, which would seem to give some indication of the land value, given that the buyers are essentially valuing the houses at zero.  (That's a reach, in my opinion, but it's all I have to go by.)  For instance, a ~ 1,600 sf house nearby was sold for $730K about 10 months ago.  The buyers wiped the lot clean.  So, that to me says they valued the lot at roughly the closing price plus the cost of demolition, which ultimately puts the land value at ~ $1.15M/acre.  I don't think I'm using a very sharp pencil though.  I mean, the house didn't suck, it was just 50 years old and relatively small, probably in need of a lot of updating.

I guess that gets down to my real question:  if we agree that the value of a tiny, falling-down shack is $0, and we agree that a brand new urban farmhouse for all the Cindy Lou MILFs is worth $275K/sf (or whatever build costs are these days), then how does one assess the value of a somewhat aging house that's still perfectly good?  Is it tied to the cost of upgrading to current "standards"?

Ultimately, it would seem that finding one single buyer who doesn't want to tear down could radically change the "worth" of a piece of property.

I think I want to go to appraiser school.  Only half kidding -- I find it a fascinating subject.

[Gil Bang 25960]

53 minutes ago, jimmyjazz said:

Can we talk about Appraising the Value of a Home 101?  Focus on Austin.  Ground rules:  "ask a realtor for a CMA" is off limits as an answer. 

I am specifically trying to learn how one might assess what goes into the closing price on a single family house, which of course varies by location (among other things).  At the highest level, it seems like $/sf is a pretty poor predictor of value, because it ignores land value.  That said, splitting a closing price into "house value" and "land value" is tricky -- one equation, two unknowns.

Toward that end, I have gotten closing prices on "tear downs" in my area, which would seem to give some indication of the land value, given that the buyers are essentially valuing the houses at zero.  (That's a reach, in my opinion, but it's all I have to go by.)  For instance, a ~ 1,600 sf house nearby was sold for $730K about 10 months ago.  The buyers wiped the lot clean.  So, that to me says they valued the lot at roughly the closing price plus the cost of demolition, which ultimately puts the land value at ~ $1.15M/acre.  I don't think I'm using a very sharp pencil though.  I mean, the house didn't suck, it was just 50 years old and relatively small, probably in need of a lot of updating.

I guess that gets down to my real question:  if we agree that the value of a tiny, falling-down shack is $0, and we agree that a brand new urban farmhouse for all the Cindy Lou MILFs is worth $275K/sf (or whatever build costs are these days), then how does one assess the value of a somewhat aging house that's still perfectly good?  Is it tied to the cost of upgrading to current "standards"?

Ultimately, it would seem that finding one single buyer who doesn't want to tear down could radically change the "worth" of a piece of property.

I think I want to go to appraiser school.  Only half kidding -- I find it a fascinating subject.

For a livable house, comparable sales is the best way to value a house.  For a non-livable but salvageable house, comparable sales+cost to repair.  

[jimmyjazz 45963]

2 minutes ago, Gil Bang said:

For a livable house, comparable sales is the best way to value a house.  For a non-livable but salvageable house, comparable sales+cost to repair.  

What defines "livable" and "comparable"?  Is it reasonable to compare a 5 YO house to a 35 YO house down the road on the same size lot?  I'm trying to figure how age & condition factor in.

[Gil Bang 25960]

26 minutes ago, jimmyjazz said:

What defines "livable" and "comparable"?  Is it reasonable to compare a 5 YO house to a 35 YO house down the road on the same size lot?  I'm trying to figure how age & condition factor in.

 

Adjustments are made for age and condition. 

So, you have the subject home (that you are trying to value).  Call it "S".    For purposes of the discussion, say "S" is 5 years old.  Now comp "A" is 35 years old per your example.  The appraiser will take the sales price of comp A, and adjust it up for age, because, obviously the newer home is more valuable than the older home.  

 

This might  be helpful:  https://clevelandappraisalblog.com/2021/03/04/when-how-do-appraisers-adjust-for-age/

[jimmyjazz 45963]

5 minutes ago, Gil Bang said:

This might  be helpful:  https://clevelandappraisalblog.com/2021/03/04/when-how-do-appraisers-adjust-for-age/

That's a good article, thanks.  Back to my "not so sharp pencil" assertion, that's reflective of a true deep dive on value, which the lay person (me) or even a realtor running a "CMA" can't determine without actually entering the home.

I think I'll extend my analysis by looking at more tear-down sales prices in the area, estimating land value by neighborhood based on those lot sizes, and then further trying to assess home $/sf by build date.  It will be rough, and the error bars will not be small, but it's better than "oh, Austin is pulling $350/sf".

[Gil Bang 25960]

1 minute ago, jimmyjazz said:

That's a good article, thanks.  Back to my "not so sharp pencil" assertion, that's reflective of a true deep dive on value, which the lay person (me) or even a realtor running a "CMA" can't determine without actually entering the home.

I think I'll extend my analysis by looking at more tear-down sales prices in the area, estimating land value by neighborhood based on those lot sizes, and then further trying to assess home $/sf by build date.  It will be rough, and the error bars will not be small, but it's better than "oh, Austin is pulling $350/sf".

As to the bolded part, that's why hard-working guys like me go and see every single listing in the neighborhoods that we work, even if I don't have a buyer for it.  That way, if six months from now I'm doing a CMA on a house in the area, I can use the comps intelligently.  And if by some chance there's a comp that I didn't see, I pick up the phone and call one of the agents that were involved, and ask about it. 

I sometimes get those calls from appraisers and other agents, and I'm always happy to tell them everything that I know about a given property.  It's good for the industry as a whole. 

[UTPhil2006 3807]

Our main lender and our bread and butter one UWM made the following adjustments this morning to their pricing matrix.

Investment properties and 2^nd Homes Adjustments

-        Reductions:

o   50 bps – Investments

o   25 bps – second Homes < 80% LTV

o   50 bps – second homes > 80% LTV

 

I know a bunch of you have second homes, lake homes, beach homes, etc and a bunch of you have investment properties as well and also some of you are looking to buy 2nd/INV homes as well so that's a pretty decent pricing bump for any refinances or purchases you guys may want to take a look at.  If you need me to run numbers you can PM me or faster response pdubord@prodigymbo.com

[Gil Bang 25960]

Having only recently extracted a commitment from its approved AMCs to turn appraisals around in 10 days or refund half of the cost, United Wholesale Mortgage now plans to launch its own appraisal desk on Oct. 1. Adopting the practice of many retail lenders, UWM has built a team of 100 employees and developed software that will allow it to bypass AMCs and work directly with appraisers to schedule, execute and deliver appraisals in 5 to 7 days — without charging a management fee. 

 

It’s up to you — keep working with a UWM-approved appraisal management company, or give UWM Appraisal Direct a spin. UWM Chief Strategy Officer Alex Elezaj tells Inman that the program is “100 percent compliant” with appraisal independence requirements adopted in the wake of the 2007-2009 housing crash and recession to protect appraisers from lender coercion. 

 

Appraisal Institute President Rodman Schley says the professional association “supports innovation in the lending industry,” and is “hearing about more situations like this, and other innovations, including internal staff models and use of technology platforms or ‘portals,’ that help lenders manage the appraisal function with quality top of mind.”

[Wulaw Horn 19073]

1 minute ago, Gil Bang said:

Having only recently extracted a commitment from its approved AMCs to turn appraisals around in 10 days or refund half of the cost, United Wholesale Mortgage now plans to launch its own appraisal desk on Oct. 1. Adopting the practice of many retail lenders, UWM has built a team of 100 employees and developed software that will allow it to bypass AMCs and work directly with appraisers to schedule, execute and deliver appraisals in 5 to 7 days — without charging a management fee. 

 

It’s up to you — keep working with a UWM-approved appraisal management company, or give UWM Appraisal Direct a spin. UWM Chief Strategy Officer Alex Elezaj tells Inman that the program is “100 percent compliant” with appraisal independence requirements adopted in the wake of the 2007-2009 housing crash and recession to protect appraisers from lender coercion. 

 

Appraisal Institute President Rodman Schley says the professional association “supports innovation in the lending industry,” and is “hearing about more situations like this, and other innovations, including internal staff models and use of technology platforms or ‘portals,’ that help lenders manage the appraisal function with quality top of mind.”

Appraisals have been a total and complete shit show the last year or so. If UWM has this on lock down and can make sure appraisals get back in 10 days we can pretty comfortably go from contract to close in 20 days, imo.  I've had 5 and 6 day submission to CTC with them with appraisal waivers- we are averaging something like 11.5 days from submission to CTC on non appraisal waiver deals and 28 days on deals with an appraisal.  When you consider that you have to have the file for a bit before it gets submitted through the disclosure process that means the average time for appraisal deals is over 30 days- which puts us something like 16 or 17 days longer on appraisal deals.

Since we can work in parallel for most stuff that doesn't require waiting on appraisal to come in that would be a huge win.  We shall see. 

[UTPhil2006 3807]

1 hour ago, Gil Bang said:

Having only recently extracted a commitment from its approved AMCs to turn appraisals around in 10 days or refund half of the cost, United Wholesale Mortgage now plans to launch its own appraisal desk on Oct. 1. Adopting the practice of many retail lenders, UWM has built a team of 100 employees and developed software that will allow it to bypass AMCs and work directly with appraisers to schedule, execute and deliver appraisals in 5 to 7 days — without charging a management fee. 

 

It’s up to you — keep working with a UWM-approved appraisal management company, or give UWM Appraisal Direct a spin. UWM Chief Strategy Officer Alex Elezaj tells Inman that the program is “100 percent compliant” with appraisal independence requirements adopted in the wake of the 2007-2009 housing crash and recession to protect appraisers from lender coercion. 

 

Appraisal Institute President Rodman Schley says the professional association “supports innovation in the lending industry,” and is “hearing about more situations like this, and other innovations, including internal staff models and use of technology platforms or ‘portals,’ that help lenders manage the appraisal function with quality top of mind.”

Yeah this is a gamechanger.