All Encompassing Mortgage and Real Estate Thread

[KYHorn 17264]

17 hours ago, Wulaw Horn said:

Ha, now 57 basis points on the day, 21 more since you posted 10 minutes ago.  Fun fun fun.  We had what 5 positive days in a row where we got a total of 50 or so bips back.  Bookended by losing 67 the day before the streak and now down 60 on the back end of the streak.  Yeah- 5 wins and 2 losses and a run differential of -67.  Good times!

Down is good (lower rate), right?

On 1/25/2022 at 3:33 PM, T’Boo Ted Marshall said:

I'm a recovering slumlord and considering getting back in the game with our current primary.  I was thinking that if I go that route I really need multiple rentals, not just one.  I'm curious to see those out there with multiple properties as opposed to one.  I've heard various CPA's say that one rental won't get you the ROI you desire.  

I'm facing a similar decision as we look to get a larger home. With the low 15 year rate we have, it is really difficult to sell our current primary. It just doesn't make a lot of sense to sell when the rent would more than cover the monthly payment + 10% maintenance + 10% empty, and still have enough leftover to cover a higher mortgage payment in the new home. After doing some fairly informed calculations on it, we figured we'd only gain $3k annually by selling our primary and using it to lower our new mortgage principal. 

If anyone has additional input on these calculations, I've very open to it- I'm sure I'm missing a consideration. 

[Wulaw Horn 19236]

1 hour ago, KYHorn said:

Down is good (lower rate), right?

I'm facing a similar decision as we look to get a larger home. With the low 15 year rate we have, it is really difficult to sell our current primary. It just doesn't make a lot of sense to sell when the rent would more than cover the monthly payment + 10% maintenance + 10% empty, and still have enough leftover to cover a higher mortgage payment in the new home. After doing some fairly informed calculations on it, we figured we'd only gain $3k annually by selling our primary and using it to lower our new mortgage principal. 

If anyone has additional input on these calculations, I've very open to it- I'm sure I'm missing a consideration. 

No. Down in the mortgage backed security market (which is what I quote) means up for interest rates. It’s an inverse relationship. 
As to the other keep the house. It’s a good investment. Let someone else pay most of the carrying costs and it will be paid off and cash flowing you into retirement investment. 
many net worth is about 800,000 poorer from selling my houses and the disparity grows daily. It’s not worth selling and there’s likely great tax advantages to keeping the rental during your prime earning years. Unless you hate the idea of being a landlord. 

[UTPhil2006 3828]

Down on the 10 year Treasury Note (^TNX) is good.. here's a link if you want to follow - https://finance.yahoo.com/quote/^TNX?p=^TNX

We are down .04 today so most of what we gained yesterday.

[jimmyjazz 46470]

Let's talk Austin proper:  what are the thoughts on real estate values going forward?  Despite rising interest rates, I'm having a hard time seeing a major deceleration in price growth.  There is not enough supply and too much demand, which is only being exacerbated by the explosion of tech and industry coming to town.

Full disclosure:  I am quite literally trying to time our exit from this city.  I'll happily rent an appreciating house out should we bail sooner than the market peaks, although that makes me less nimble in the event of a sudden correction.  

[UTPhil2006 3828]

I don't see it going down.  We may not see the same level of explosion we saw the last 18 months or so, but like you said there's too much demand right now for it to go downward.  And we're only about 6 weeks from when we start getting into "buying season" which seems to start earlier every year (summer obviously being the hottest months)..

[T’Boo Ted Marshall 2741]

5 hours ago, KYHorn said:

 

I'm facing a similar decision as we look to get a larger home. With the low 15 year rate we have, it is really difficult to sell our current primary. It just doesn't make a lot of sense to sell when the rent would more than cover the monthly payment + 10% maintenance + 10% empty, and still have enough leftover to cover a higher mortgage payment in the new home. After doing some fairly informed calculations on it, we figured we'd only gain $3k annually by selling our primary and using it to lower our new mortgage principal. 

If anyone has additional input on these calculations, I've very open to it- I'm sure I'm missing a consideration. 

We wouldn't have any issue selling our primary and we are at 17% LTV on a 15 year note.  Maybe 5 years left to pay.  Rent would more than cover all expenses and PM fees with about $5K per year Net.  I think our issue would be the DTI ratio on the new home purchase without past rental history being a factor and the liquid amount we would be putting into the new home purchase using a lot of our funds saved.  

[Wulaw Horn 19236]

What Phil said.  

It's a pretty simple supply and demand thing.  Austin is still growing and booming and there's more people who want to move and buy than there are places for them to move and buy. I have two cousins moving there from Washington- they want out of bad weather, covid lock downs and even with what we think are absurd prices they are non-plussed- it's better than where they are moving from.  Same with tech people moving from California etc.  Still a lower cost area than a lot of the areas people are moving from.  

As long as Texas continues to be additive in net migration, and I don't see anything culturally, politically or economically that will make that not continue to be the case for the foreseeable future, prices should continue to rise.  

Are we still bumping along at 1 months supply on the market?

[jimmyjazz 46470]

31 minutes ago, Wulaw Horn said:

Are we still bumping along at 1 months supply on the market?

ABOR says December 2021 supply for Austin/Round Rock metro area was 0.6 months.  Insanity.

[Wulaw Horn 19236]

8 minutes ago, jimmyjazz said:

ABOR says December 2021 supply for Austin/Round Rock metro area was 0.6 months.  Insanity.

Indeed.  Absolutely insane that I could say 1 month supply and it actually be twice as bad. 

[Neonmoon 38130]

I'm guessing @Wulaw Horn is happy about the free $600 appraisal for his borrowers from UWM?

[Wulaw Horn 19236]

5 minutes ago, Neonmoon said:

I'm guessing @Wulaw Horn is happy about the free $600 appraisal for his borrowers from UWM?

Their pricing has become such ass that I don't know that I'm going to take them up on it... 

Their rate sheet $500k sales price with 20% down and good credit...

Their rate sheet:

 

2/25/2022

Last Pricing Update:

1/27/2022 10:22 AM

Rate	APR	Price	Discount/Rebate %	Discount/Rebate $	Lender Fees	P & I	Total Payment
2.874%	3.250%	95.609	(4.391%)	($17,564)	$1,148	$1,659	$1,659
2.999%	3.320%	96.305	(3.695%)	($14,780)	$1,148	$1,686	$1,686
3.125%	3.404%	96.837	(3.163%)	($12,652)	$1,148	$1,714	$1,714
3.250%	3.500%	97.206	(2.794%)	($11,176)	$1,148	$1,741	$1,741
3.375%	3.580%	97.767	(2.233%)	($8,932)	$1,148	$1,768	$1,768
3.500%	3.666%	98.260	(1.740%)	($6,960)	$1,148	$1,796	$1,796
3.625%	3.757%	98.683	(1.317%)	($5,268)	$1,148	$1,824	$1,824
3.750%	3.827%	99.345	(0.655%)	($2,620)	$1,148	$1,852	$1,852
3.875%	3.916%	99.785	(0.215%)	($860)	$1,148	$1,881	$1,881
4.000%	4.024%	100.181	0.181%	$724	$1,148	$1,910	$1,910
4.125%	4.149%	100.691	0.691%	$2,764	$1,148	$1,939	$1,939
4.250%	4.274%	101.313	1.313%	$5,252	$1,148	$1,968	$1,968
4.375%	4.399%	101.500	1.500%	$6,000	$1,148	$1,997	$1,997

 

Brand X's rate sheet

 

Lock Period:

15

30

45

60

90

120

Lock Expiration:

2/25/2022

Last Pricing Update:

1/27/2022 12:12 PM

Rate	APR	Price	Discount/Rebate %	Discount/Rebate $	Lender Fees	P & I	Total Payment
2.250%	2.865%	92.472	(7.528%)	($30,112)	$870	$1,529	$1,529
2.375%	2.935%	93.176	(6.824%)	($27,296)	$870	$1,555	$1,555
2.500%	3.025%	93.635	(6.365%)	($25,460)	$870	$1,580	$1,580
2.625%	3.074%	94.586	(5.414%)	($21,656)	$870	$1,607	$1,607
2.750%	3.137%	95.375	(4.625%)	($18,500)	$870	$1,633	$1,633
2.875%	3.205%	96.099	(3.901%)	($15,604)	$870	$1,660	$1,660
2.990%	3.300%	96.361	(3.639%)	($14,556)	$870	$1,684	$1,684
3.000%	3.305%	96.428	(3.572%)	($14,288)	$870	$1,686	$1,686
3.125%	3.390%	96.928	(3.072%)	($12,288)	$870	$1,714	$1,714
3.250%	3.441%	97.853	(2.147%)	($8,588)	$870	$1,741	$1,741
3.375%	3.522%	98.402	(1.598%)	($6,392)	$870	$1,768	$1,768
3.500%	3.625%	98.681	(1.319%)	($5,276)	$870	$1,796	$1,796
3.625%	3.688%	99.450	(0.550%)	($2,200)	$870	$1,824	$1,824
3.750%	3.768%	100.145	0.145%	$580	$870	$1,852	$1,852
3.875%	3.893%	100.640	0.640%	$2,560	$870	$1,881	$1,881
3.950%	3.968%	100.801	0.801%	$3,204	$870	$1,898	$1,898
4.000%	4.018%	100.843	0.843%	$3,372	$870	$1,910	$1,910
4.125%	4.143%	101.393	1.393%	$5,572	$870	$1,939	$1,939
4.250%	4.268%	102.035	2.035%	$8,140	$870	$1,968	$1,968
4.375%	4.393%	102.325	2.325%	$9,300	$870	$1,997	$1,997
4.500%	4.519%	102.534	2.534%	$10,136	$870	$2,027	$2,027
4.625%	4.644%	102.750	2.750%	$11,000	$870	$2,057	$2,057
They are literally $3000 behind everywhere

[Wulaw Horn 19236]

*Disclaimer-

This is all raw pricing on an invented scenario, not a promise to lend, blah blah blah.  Seriously, I have other lenders but these two and the ability to do borrower paid origination so this is just stock and rack rate as a means of demonstrating pricing in the market from a couple lenders. 

How many loans am I going to do if I'm saying 4.0% right now when the sharper guys in the market are going with par at 3.75 and the guys trying to get a little skinny are doing it at 3.6?  That $600.00 appraisal seems awful expensive to me at this point in time. Now- do I think they are going to continue to be 1.00 point behind the sharper guys in the market? No.  But I'm making new relationships. 

We were a broker for 6 months last year and we hit their top 1% club.  Because it's easy, and their pricing was good enough that it was as good as any in the market or if it wasn't we'd swallow a little bit of a bitter pill and move on with it.  But they've been unreasonable since the first of the year and rates starting to go up.  I've got my normal 80/20 mix with them switched to 20/80.  Which is a shame b/c they are faaaaaaast if you know the system and are pro-elite like we are. And the Schrute Bucks are pretty valuable.  But they are a broker conduit to the market.  And their pricing sucks shit through a straw right now.  We've just now sent deals to 5 different places that we've never used before and 3 or 4 that we typically use some times but not all the time in February alone.  $600.00 isn't gonna make me change my mind on that.  

End of inside baseball.  We are pretty transparent about things like pricing and service times and levels with our borrowers.  Maybe this is oversharing or maybe some people on here always wanted to know what a rate sheet looked like.  

[UTPhil2006 3828]

Guessing you've got both of those set to lender paid, which then theoretically 4.0% would be par.  But most that we deal with are far below that.  UWM (at least for our status) has been pretty consistent industry wise (CMG has their days, amongst other lenders) but to answer the question above the $600 appraisal credit doesn't really move the needle.  Don't really like their appraisal direct software and it's slow and overpriced.  It's kind of like a builder.. I can save you $600 over here but oh look your kitchen costs $600 more now.  We do all our loans with UWM correspondent and then go through Appraisal House almost 90% of the time as they are responsive timely and work harder than most AMC's we've dealt with (a low threshold) so yeah the $600 appraisal credit from UWM doesn't really accomplish much as far as sales, etc.

[Wulaw Horn 19236]

5 minutes ago, UTPhil2006 said:

Guessing you've got both of those set to lender paid, which then theoretically 4.0% would be par.  But most that we deal with are far below that.  UWM (at least for our status) has been pretty consistent industry wise (CMG has their days, amongst other lenders) but to answer the question above the $600 appraisal credit doesn't really move the needle.  Don't really like their appraisal direct software and it's slow and overpriced.  It's kind of like a builder.. I can save you $600 over here but oh look your kitchen costs $600 more now.  We do all our loans with UWM correspondent and then go through Appraisal House almost 90% of the time as they are responsive timely and work harder than most AMC's we've dealt with (a low threshold) so yeah the $600 appraisal credit from UWM doesn't really accomplish much as far as sales, etc.

Yes- that was set to lender paid totally and completely just to show demonstration of what the jumping off point would be if it was just a rack rate off the street. That's not at all what we'd be putting a borrower in at.

That particular scenario I proposed we'd probably do at 3.5% with one of our more aggressive lenders, and flip the buyers a $400.00 credit at that rate.  Probably. But of course it's also going to depend on how much time you have left before the closing needs to happen.  If I wanted to do that at 3.5% with UWM that's a non-starter- I'm working then for 75 basis points.  That's just not in any way sustainable.  But I've got other lenders I can make close to 160 basis points at 3.5%  Yep, I can do that deal all the time, be better than almost everyone's pricing and still, you know, run a business.  UWM used to do that. My experience is that it doesn't work for us. 

I strongly suspect that they will get back toward the top of the market pricing wise once things chill out a little bit.  But, I think the appraisal direct play is them trying to charge more premium prices by providing even more turn key services, so maybe it's a new strategy and they won't price toward the top anymore.  Will be interested to see where pricing goes and shakes out.  I wonder how many people will deal with this by trying to get skinnier on every deal and how many people will go the other way and say- forget it I'm just going to go do less deals and figure out a way to clip guys for a bigger number on every commission.  And how many guys will just go out of business.  Because if the guys are right that put this information together and the market is going to see a 30% reduction in applications that's going to leave a mark. 

[Wulaw Horn 19236]

20 minutes ago, UTPhil2006 said:

Guessing you've got both of those set to lender paid, which then theoretically 4.0% would be par.  But most that we deal with are far below that.  UWM (at least for our status) has been pretty consistent industry wise (CMG has their days, amongst other lenders) but to answer the question above the $600 appraisal credit doesn't really move the needle.  Don't really like their appraisal direct software and it's slow and overpriced.  It's kind of like a builder.. I can save you $600 over here but oh look your kitchen costs $600 more now.  We do all our loans with UWM correspondent and then go through Appraisal House almost 90% of the time as they are responsive timely and work harder than most AMC's we've dealt with (a low threshold) so yeah the $600 appraisal credit from UWM doesn't really accomplish much as far as sales, etc.

And just to follow up- completely agree with you that the $600.00 is exactly a 3 card monte game.  And I think it's rigged in their favor. My sense is if they are going to give away $600 they are likely to price that into the rate to the tune of $800 or $1000.  Kind of like lender paid PMI.  Kind of like 90 day locks. Or lock and shop.  Or DPAP's, Or whatever other bell and whistle any lender comes up with- it typically just doesn't pencil out for the average dude out there.  Hero programs have lots of that going on too.  Oh, boy, look forward to a buttfucking if you go to veterans united for your VA loan. It's like running the other way when someone hands me a business card with their fish on it or favorite bible verse.  Nope. No thanks.  Not gonna do it.  Oh lord, prepare thy anus.  

[Neonmoon 38130]

It’s a gimmick. But people are stupid and will fall for it. 

[Wulaw Horn 19236]

36 minutes ago, Neonmoon said:

It’s a gimmick. But people are stupid and will fall for it. 

This is true. 

[Wulaw Horn 19236]

Don’t call it a come back!  20 basis points up today. 33 basis points yesterday. Gets us almost back to where we were before Powell started talking Wednesday at lunch time. 

[UT_OB1 2227]

Finally closed on the 2 cash outs.  Thank you Phil, Thad and Dana!  First round of hookers and blow using what is supposed to be investment money is on me. 
 

Im a bit burned out, and rather than try to find something to buy and fix up, I’m tempted to buy 2-3 SF or a smaller 2-4 plex that is already ready to rent. But that would get me back to my points earlier - it would only be investing and hoping for appreciation. Easier methods to invest. 

[UTPhil2006 3828]

13 hours ago, UT_OB1 said:

Finally closed on the 2 cash outs.  Thank you Phil, Thad and Dana!  First round of hookers and blow using what is supposed to be investment money is on me. 
 

Im a bit burned out, and rather than try to find something to buy and fix up, I’m tempted to buy 2-3 SF or a smaller 2-4 plex that is already ready to rent. But that would get me back to my points earlier - it would only be investing and hoping for appreciation. Easier methods to invest. 

Finally done with all 3.  Thanks for the continued use and support.  Second round of hookers and blow on me.

[Esque 135]

After dealing with scheming realtors the last few weeks, how has technology not made this "job" obsolete?  What value do they bring to the table that substantiates their compensation?

[UT_OB1 2227]

2 hours ago, Esque said:

After dealing with scheming realtors the last few weeks, how has technology not made this "job" obsolete?  What value do they bring to the table that substantiates their compensation?

This will be fun

 

[Armybrat 40987]

Two new builds on a scraped lot on Orland (my son’s street) in South Austin just off S.1st.
In the finishing stage, listed by some Iowa company.
A bit different - built side by side instead of front & back.... to provide a larger back yard for both.

 

[Wulaw Horn 19236]

2 minutes ago, Armybrat said:

Two new builds on a scraped lot on Orland (my son’s street) in South Austin just off S.1st.
In the finishing stage, listed by some Iowa company.
A bit different - built side by side instead of front & back.... to provide a larger back yard for both.

 

Why aren’t these houses upside down? 

[Armybrat 40987]

3 minutes ago, Wulaw Horn said:

Why aren’t these houses upside down? 

Because Mrs. Brat took the pictures.

Those houses would look better that way.

jmo

Edited January 31, 2022 by Armybrat

[UTPhil2006 3828]

Something to be cognizant of for you 2nd home buyers (and refi) and high balance loans (not really as big of a deal since the loan limit is already high here in Texas and there are split lien deals, etc) are probably going to see that rate hike go into effect tomorrow.  Fannie announced they were raising rates on them (and fairly significant hike) April 1st but lenders are going to start pricing them in now.  Most are starting tomorrow (60 days out) but there may be a straggler or two lending wise that may wait but I'd say if you have anything you'd want to take a look at that time is today to do that. 

Nothing has come across yet about investment properties yet but seeing how the trend is going with all of these lately I'd jump on those sooner rather than later as well.

[Wulaw Horn 19236]

2 minutes ago, UTPhil2006 said:

Something to be cognizant of for you 2nd home buyers (and refi) and high balance loans (not really as big of a deal since the loan limit is already high here in Texas and there are split lien deals, etc) are probably going to see that rate hike go into effect tomorrow.  Fannie announced they were raising rates on them (and fairly significant hike) April 1st but lenders are going to start pricing them in now.  Most are starting tomorrow (60 days out) but there may be a straggler or two lending wise that may wait but I'd say if you have anything you'd want to take a look at that time is today to do that. 

Nothing has come across yet about investment properties yet but seeing how the trend is going with all of these lately I'd jump on those sooner rather than later as well.

So this is an interesting point on nothing coming across on investment properties yet… 

With that very very big rate hit on high ltv second homes that seems, by my calculations, like it’s going to make second homes more pricey than investment homes. 
which, if you think about it, is quite frankly insane. 
wonder how that home is getting patched (oh who am I kidding- same thing comes down the pike for investment property hikes homes, right?)

[KYHorn 17264]

29 minutes ago, UTPhil2006 said:

Something to be cognizant of for you 2nd home buyers (and refi) and high balance loans (not really as big of a deal since the loan limit is already high here in Texas and there are split lien deals, etc) are probably going to see that rate hike go into effect tomorrow.  Fannie announced they were raising rates on them (and fairly significant hike) April 1st but lenders are going to start pricing them in now.  Most are starting tomorrow (60 days out) but there may be a straggler or two lending wise that may wait but I'd say if you have anything you'd want to take a look at that time is today to do that. 

Nothing has come across yet about investment properties yet but seeing how the trend is going with all of these lately I'd jump on those sooner rather than later as well.

 

24 minutes ago, Wulaw Horn said:

So this is an interesting point on nothing coming across on investment properties yet… 

With that very very big rate hit on high ltv second homes that seems, by my calculations, like it’s going to make second homes more pricey than investment homes. 
which, if you think about it, is quite frankly insane. 
wonder how that home is getting patched (oh who am I kidding- same thing comes down the pike for investment property hikes homes, right?)

Just to clarify, we're planning to rent our existing home out when we buy a new home as soon as on becomes available in the neighborhood we're looking at. Are you expecting an across the board hike for this situation?

[UT_OB1 2227]

31 minutes ago, KYHorn said:

 

Just to clarify, we're planning to rent our existing home out when we buy a new home as soon as on becomes available in the neighborhood we're looking at. Are you expecting an across the board hike for this situation?

You’re old loan won’t change. Your new house shouldn’t take a rate hit because it is where you will be moving and be your primary residence 

[UTPhil2006 3828]

13 minutes ago, UT_OB1 said:

You’re old loan won’t change. Your new house shouldn’t take a rate hit because it is where you will be moving and be your primary residence 

This.

[Dbeasy 15225]

On 1/30/2022 at 11:54 AM, Esque said:

After dealing with scheming realtors the last few weeks, how has technology not made this "job" obsolete?  What value do they bring to the table that substantiates their compensation?

I am a tech guy with a real estate license who is heavily in tune with the value propositions of the tech companies trying to change the real estate game, but also the value proposition of realtors.

The answer to your question depends specifically on the situation of the purchase or sale you are anticipating. In some cases, bypassing the realtor world might make sense, or at least engaging it differently under specific financial conditions. If you want to share a scenario we can comment on it. 

[Dbeasy 15225]

On 1/27/2022 at 12:36 PM, jimmyjazz said:

Let's talk Austin proper:  what are the thoughts on real estate values going forward?  Despite rising interest rates, I'm having a hard time seeing a major deceleration in price growth.  There is not enough supply and too much demand, which is only being exacerbated by the explosion of tech and industry coming to town.

Full disclosure:  I am quite literally trying to time our exit from this city.  I'll happily rent an appreciating house out should we bail sooner than the market peaks, although that makes me less nimble in the event of a sudden correction.  

The market could be very volatile in the future. Let me give you a specific example. Last summer I was putting a house up for sale for a client, and I was pushing them hard to get it on the market in July before the August slowdown. They couldn’t make it until mid August. 

The first week we had five offers, all over asking price, one by a significant amount. It was a house with some specific features that only appealed to a certain segment. 

Within five days all of the offers evaporated, including two that were under contract, because the inventory vs buyer ratio quickly changed and they literally found better deals. It took another month to sell the house and a $50,000 drop from the originally contracted price. Why?

Because a strong pipeline of buyers with the right inventory level produces strong pressure on buyers to make a decision and it shoots up prices big time. The opposite also occurs. 

This year should still be very good, but the market is definitely approaching a much slower rate of increase for many reasons. Lurking out there is a significant downside scenario if economic growth slows significantly. If I were you I’d think hard about bringing it to market in April, if you are thinking of doing it this year. 

When you list, I wouldn’t pay a full commission price. I always discount listings on more expensive houses. If I recall you are in Northwest Hills. That should be a straightforward sale. Great great neighborhoods. 

[jimmyjazz 46470]

Yeah, the closer we get to the point in time we identified a couple of years ago as "get outta town" time, the less likely we are to pull the trigger.  I can see us living here for another year, for sure, and maybe renting the house out after that.  It's still a moving target.

[Chewbacca 7793]

On 1/30/2022 at 10:54 AM, Esque said:

After dealing with scheming realtors the last few weeks, how has technology not made this "job" obsolete?  What value do they bring to the table that substantiates their compensation?

They control the MLS.  That's about it.

[Wulaw Horn 19236]

1 hour ago, Chewbacca said:

They control the MLS.  That's about it.

And that’s certainly not nothing. That’s a big deal. 
I think on average houses listed with an agent do 7 or 8% better than not. So they aren’t costing you money if that’s correct. 
is it possible that number is outdated, bullshit or misleading? 
Sure. 
the biggest reason most people need an agent is because they are ignorant of how to take care of what needs taking care of and don’t have the time to figure it out, or stupid and can’t figure it out. If that doesn’t apply to you mazel tov. 

Edited January 31, 2022 by Wulaw Horn

[Neonmoon 38130]

I’m absurdly curious about how the real estate and lending worlds change over the next 10 years. For real estate agents, will they hold the line on the 3%, or will the Redfin 1%, or other fee structure gain market share? Will the more tech savvy generations lean into virtual agents and fintech lenders? 

[Gil Bang 26099]

On a listing, I have two jobs:

1) maximize my seller's proceeds

2) keep my seller from getting sued at a later date.

 

I'm really good at both of those things.    

[Muny_Tex 298]

In a traditional buyer’s market, a good realtor is invaluable to a prospective client…they have intimate knowledge of the sales pipeline, can facilitate successful negotiations, and leverage trusted relationships to optimize lending/appraisals/warranties/etc.

Conversely, in a ultra competitive gold rush environment like today you can have the best agent in the world and it doesn’t really make a shit when competing with 25+ offers / cash-only bias / and waived option periods and appraisals.

When you’ve got hordes of buyers frequently submitting offers sight unseen, or pursuing new builds in catalog-style subdivisions it is difficult to justify paying 3% on the seller side to compensate someone who essentially just performed 40 seconds of clicking on a DocuSign template.

If the realtor lobby can be defeated, I expect we will soon see some sort of TSAPrecheck equivalent that will allow potential buyers to access lock boxes and view select properties while subject to video surveillance…which I think is where that 1% commission becomes a slam dunk just to provide administrative oversight.

I’m not a real estate wiz, and managed to buy a condo (conventional loan) in Central Austin unrepresented in Fall 2020 right before the market went full retard…ended up strengthening my offer (and beating out 2 others) since I could essentially deliver “over-ask” at list price due to no extra commission owed…seller’s agent was super cool and even let me submit a brief “hey pick me” letter and everything.

That said, would never do a FSBO on the seller side in a trillion years; mainly for the reasons Gil mentioned.


Sent from my iPhone using Tapatalk

[CooterBrown 18089]

I’m absurdly curious about how the real estate and lending worlds change over the next 10 years. For real estate agents, will they hold the line on the 3%, or will the Redfin 1%, or other fee structure gain market share? Will the more tech savvy generations lean into virtual agents and fintech lenders? 

Doesn’t matter. They won’t unlock the lockbox for less than 3%. As long as they have that power, realtors will never go away.

Seriously though, the buyer side will probably go away first. In the UK, agents only rep the seller and show the houses. Buyers are on their own to identify houses. They then have a real estate attorney handle the transaction for a flat fee.

[Wulaw Horn 19236]

38 minutes ago, Muny_Tex said:

In a traditional buyer’s market, a good realtor is invaluable to a prospective client…they have intimate knowledge of the sales pipeline, can facilitate successful negotiations, and leverage trusted relationships to optimize lending/appraisals/warranties/etc.

Conversely, in a ultra competitive gold rush environment like today you can have the best agent in the world and it doesn’t really make a shit when competing with 25+ offers / cash-only bias / and waived option periods and appraisals.

When you’ve got hordes of buyers frequently submitting offers sight unseen, or pursuing new builds in catalog-style subdivisions it is difficult to justify paying 3% on the seller side to compensate someone who essentially just performed 40 seconds of clicking on a DocuSign template.

If the realtor lobby can be defeated, I expect we will soon see some sort of TSAPrecheck equivalent that will allow potential buyers to access lock boxes and view select properties while subject to video surveillance…which I think is where that 1% commission becomes a slam dunk just to provide administrative oversight.

I’m not a real estate wiz, and managed to buy a condo (conventional loan) in Central Austin unrepresented in Fall 2020 right before the market went full retard…ended up strengthening my offer (and beating out 2 others) since I could essentially deliver “over-ask” at list price due to no extra commission owed…seller’s agent was super cool and even let me submit a brief “hey pick me” letter and everything.

That said, would never do a FSBO on the seller side in a trillion years; mainly for the reasons Gil mentioned.


Sent from my iPhone using Tapatalk

Really well said. 
I’ve worked without an agent on 4 of my 7 purchases as a buyer. No ducking way would I not have an agent as a seller. It’s basically a recipe for a huge pain in the ass. 

[Wulaw Horn 19236]

40 minutes ago, Muny_Tex said:

In a traditional buyer’s market, a good realtor is invaluable to a prospective client…they have intimate knowledge of the sales pipeline, can facilitate successful negotiations, and leverage trusted relationships to optimize lending/appraisals/warranties/etc.

Conversely, in a ultra competitive gold rush environment like today you can have the best agent in the world and it doesn’t really make a shit when competing with 25+ offers / cash-only bias / and waived option periods and appraisals.

When you’ve got hordes of buyers frequently submitting offers sight unseen, or pursuing new builds in catalog-style subdivisions it is difficult to justify paying 3% on the seller side to compensate someone who essentially just performed 40 seconds of clicking on a DocuSign template.

If the realtor lobby can be defeated, I expect we will soon see some sort of TSAPrecheck equivalent that will allow potential buyers to access lock boxes and view select properties while subject to video surveillance…which I think is where that 1% commission becomes a slam dunk just to provide administrative oversight.

I’m not a real estate wiz, and managed to buy a condo (conventional loan) in Central Austin unrepresented in Fall 2020 right before the market went full retard…ended up strengthening my offer (and beating out 2 others) since I could essentially deliver “over-ask” at list price due to no extra commission owed…seller’s agent was super cool and even let me submit a brief “hey pick me” letter and everything.

That said, would never do a FSBO on the seller side in a trillion years; mainly for the reasons Gil mentioned.


Sent from my iPhone using Tapatalk

Really well said. 
I’ve worked without an agent on 4 of my 7 purchases as a buyer. No ducking way would I not have an agent as a seller. It’s basically a recipe for a huge pain in the ass. 

[Guest Lobo]

Just hit submit to pay our property taxes.  Fucking-A.  This one fucking hurt more than usual.  /rant

[South Austin 52686]

10 hours ago, Wulaw Horn said:

Really well said. 
I’ve worked without an agent on 4 of my 7 purchases as a buyer. No ducking way would I not have an agent as a seller. It’s basically a recipe for a huge pain in the ass. 

I sold my first house without an agent, but it was a matter of luck. We held onto the home – a tiny starter home around the Kinney Avenue neighborhood – for about 8 years as a rental property, and weren’t looking to sell. But a builder who was scraping and building a new home on the lot next to us called just kicking the tires, and we ended up agreeing on a price for silly money, almost $200K more than we paid for it. I was more than familiar with the TREC form contract through my law practice, and since the builder was going to tear down the house there was no need for inspections, repair negotiations, etc.

But we used an agent for the sale of our second home and wouldn’t have done that solo. The marketing, staging, open house, etc. was worth the commission.

I’ve bought 2 of 4 homes with an agent. The first was when I was moving from Dallas to Austin and we weren’t as familiar with neighborhoods and needed someone to help with the house hunting, inspections, etc. while we were in Dallas. The last was while I was wrapping up my divorce and just didn’t have the time to figure out what was available and arrange for access to homes on the market. Didn’t regret using a buyer’s agent in either case.

So I don’t thing there’s a hard and fast rule on when to use an agent as buyer or seller and when you can do it by yourself. It depends on the market, your unique circumstances, and other factors. But you can do it alone in many cases.

[UTPhil2006 3828]

9 hours ago, Lobo said:

Just hit submit to pay our property taxes.  Fucking-A.  This one fucking hurt more than usual.  /rant

The flip side of the coin to everyone's value going way up this past year.  Also why we're seeing a LOT of cash out refi's this past year.  If your property value is gonna skyrocket and you want/need money out getting 50-400k at ~3.875% is pretty solid.

[TurkeyChew 383]

17 hours ago, Muny_Tex said:

In a traditional buyer’s market, a good realtor is invaluable to a prospective client…they have intimate knowledge of the sales pipeline, can facilitate successful negotiations, and leverage trusted relationships to optimize lending/appraisals/warranties/etc.

Conversely, in a ultra competitive gold rush environment like today you can have the best agent in the world and it doesn’t really make a shit when competing with 25+ offers / cash-only bias / and waived option periods and appraisals.

When you’ve got hordes of buyers frequently submitting offers sight unseen, or pursuing new builds in catalog-style subdivisions it is difficult to justify paying 3% on the seller side to compensate someone who essentially just performed 40 seconds of clicking on a DocuSign template.

If the realtor lobby can be defeated, I expect we will soon see some sort of TSAPrecheck equivalent that will allow potential buyers to access lock boxes and view select properties while subject to video surveillance…which I think is where that 1% commission becomes a slam dunk just to provide administrative oversight.

I’m not a real estate wiz, and managed to buy a condo (conventional loan) in Central Austin unrepresented in Fall 2020 right before the market went full retard…ended up strengthening my offer (and beating out 2 others) since I could essentially deliver “over-ask” at list price due to no extra commission owed…seller’s agent was super cool and even let me submit a brief “hey pick me” letter and everything.

That said, would never do a FSBO on the seller side in a trillion years; mainly for the reasons Gil mentioned.


Sent from my iPhone using Tapatalk

I'm opposite of you. I spent $500 on some RE Software and did FSBO last summer in the height of insanity. I have realtor friends and family (at this point, who doesnt?) and was able to get some free "consulting" to validate my thinking and go-to-market thesis, and got everything I wanted and then some for a mere 3% to the buyer's agent.

I don't buy the circular logic or the appeal to purity that realtors give you with the "you only THINK you maxed out what you could have gotten and did so in a legal-proof way; a good realtor would have gotten you more and more securely."

[Wulaw Horn 19236]

7 hours ago, South Austin said:

I sold my first house without an agent, but it was a matter of luck. We held onto the home – a tiny starter home around the Kinney Avenue neighborhood – for about 8 years as a rental property, and weren’t looking to sell. But a builder who was scraping and building a new home on the lot next to us called just kicking the tires, and we ended up agreeing on a price for silly money, almost $200K more than we paid for it. I was more than familiar with the TREC form contract through my law practice, and since the builder was going to tear down the house there was no need for inspections, repair negotiations, etc.

But we used an agent for the sale of our second home and wouldn’t have done that solo. The marketing, staging, open house, etc. was worth the commission.

I’ve bought 2 of 4 homes with an agent. The first was when I was moving from Dallas to Austin and we weren’t as familiar with neighborhoods and needed someone to help with the house hunting, inspections, etc. while we were in Dallas. The last was while I was wrapping up my divorce and just didn’t have the time to figure out what was available and arrange for access to homes on the market. Didn’t regret using a buyer’s agent in either case.

So I don’t thing there’s a hard and fast rule on when to use an agent as buyer or seller and when you can do it by yourself. It depends on the market, your unique circumstances, and other factors. But you can do it alone in many cases.

Dude. You are an attorney.  You practice law.  You are really smart. Your mom is a massive whore.  You know how to access information.  People call other people stupid on this website all the time and I like to point out, occasionally, that nobody on this website is actually stupid.  The average person that isn't a lawyer, doesn't have specific real estate experience and has a 100 IQ is just not fundamentally going to be capable of selling their house without turning it into an absolute shit show.  That was my main point- not that people on this board couldn't do it if they wanted to.

Remember- the question was about "what value proposition does a realtor even bring" that this was in response to and for the average dude that's still pretty high when selling.  

[PhillyD 1278]

53 minutes ago, Wulaw Horn said:

 People call other people stupid on this website all the time and I like to point out, occasionally, that nobody on this website is actually stupid.  

You are overestimating quite a few people on Surly.  

[South Austin 52686]

57 minutes ago, Wulaw Horn said:

Dude. You are an attorney.  You practice law.  You are really smart. Your mom is a massive whore.  You know how to access information.  People call other people stupid on this website all the time and I like to point out, occasionally, that nobody on this website is actually stupid.  The average person that isn't a lawyer, doesn't have specific real estate experience and has a 100 IQ is just not fundamentally going to be capable of selling their house without turning it into an absolute shit show.  That was my main point- not that people on this board couldn't do it if they wanted to.

Remember- the question was about "what value proposition does a realtor even bring" that this was in response to and for the average dude that's still pretty high when selling.  

Seems like we're in agreement, except for the part about my poor mom.

[Scipio 61]

On 1/27/2022 at 10:36 AM, jimmyjazz said:

Let's talk Austin proper:  what are the thoughts on real estate values going forward?  Despite rising interest rates, I'm having a hard time seeing a major deceleration in price growth.  There is not enough supply and too much demand, which is only being exacerbated by the explosion of tech and industry coming to town.

Full disclosure:  I am quite literally trying to time our exit from this city.  I'll happily rent an appreciating house out should we bail sooner than the market peaks, although that makes me less nimble in the event of a sudden correction.  

I don't see a deceleration anytime soon, but macroeconomic events happen. 

I rented out my house in Austin for 17 years and there is currently a significant delta between rent and your actual costs at a lot price points. Austin rents are rising to meet demand, but I don't like eating a cash loss every month with the hope of even more appreciation to make it worth your while on the back end. You'd also need to learn to be a landlord, unless you hire property management, vile charlatans that belong in Dante's deepest circles of Hell. I don't know your individual situation though. Feel free to PM if you need a sounding board. 

I hope you can absolutely nail the high point of the market, but the quest for absolute optimization can be a trap. As you mention, homes aren't particularly nimble assets if a market dynamic shifts. 

You're in the catbird seat sitting on an enviably appreciated asset so don't fret utter optimization. 

[Gil Bang 26099]

2 hours ago, TurkeyChew said:

I'm opposite of you. I spent $500 on some RE Software and did FSBO last summer in the height of insanity. I have realtor friends and family (at this point, who doesnt?) and was able to get some free "consulting" to validate my thinking and go-to-market thesis, and got everything I wanted and then some for a mere 3% to the buyer's agent.

I don't buy the circular logic or the appeal to purity that realtors give you with the "you only THINK you maxed out what you could have gotten and did so in a legal-proof way; a good realtor would have gotten you more and more securely."

Was your property listed on the MLS?  If not, you only THINK you maxed out what you could have gotten.